Hailey Bieber shares concerns over selling skincare brand Rhode to e.l.f. Beauty

Beauty entrepreneur Hailey Bieber has shared her concerns about selling Rhode, the skincare brand she co-founded three years ago with Lauren Ratner. Speaking at the Fortune Most Powerful Women Summit on Wednesday, Bieber revealed that she had been warned about the potential downsides of a brand acquisition.

Bieber and Ratner's biggest fear was that their company would lose its identity and values after being sold to e.l.f. Beauty in a deal worth up to $1 billion. To alleviate this concern, they insisted on staying involved with the brand, with Bieber taking on a key role in creative and product innovation.

The deciding factor for Bieber wasn't the financial gain from the sale, but rather ensuring that Rhode would remain true to its mission and vision. She expressed her desire to have a significant say in the company's future direction, which was a crucial consideration for her when weighing up the pros and cons of selling the brand.

As part of the deal, Bieber has remained on board with e.l.f. Beauty, working closely with Ratner, who serves as Rhode's cofounder, president, and chief brand officer. This arrangement will allow the duo to continue driving the company's creative and product strategy, while also providing stability and security for the brand in its new ownership structure.

The acquisition of Rhode by e.l.f. Beauty has alleviated one major concern for Hailey Bieber and her co-founder Lauren Ratner.

Their primary fear was that they would lose control over their company's creative direction after a sale. They had envisioned an acquirer imposing new personnel and altering the product development process, which could have diminished their influence.

Bieber shared that she initially expressed these concerns to e.l.f., but received a reassuring response from the acquiring company.

e.l.f.'s representatives conveyed that they wanted Bieber's involvement in the business to increase or remain at its current level. This unusual approach offered a stark contrast to what is typically expected during an acquisition.

Ratner echoed this sentiment, stating that she and Bieber had worried about e.l.f. getting involved in the day-to-day operations of Rhode.

However, e.l.f.'s intentions were made clear: they aimed to enhance the company's infrastructure without disrupting its core strengths.

Hailey Bieber's experience of being acquired by e.l.f. Beauty has been a positive one, according to her own account.

They took great care to explain how they had supported the founders of every brand they had previously acquired, ensuring that their operations remained unchanged. This was music to Bieber's ears, as it addressed one of her main concerns about being acquired. She recalled e.l.f.'s representatives telling her that they didn't want to disrupt the company's core strengths.

Bieber has found that e.l.f. Beauty has kept its word in every respect. When asked which decisions remain exclusively hers, she replied without hesitation that most of them do. This level of autonomy is a testament to e.l.f.'s commitment to letting Rhode continue to operate as it sees fit.

In fact, Bieber's role at the company has grown since the acquisition, with her now holding the title of chief creative officer and serving as a strategic advisor to e.l.f. Beauty as a whole. This expanded role allows her to weigh in on the parent company's products and provide input on new ideas.

The rapid growth of Rhode had caught its founders off guard, with Hailey Bieber stating that a sale was not on their immediate agenda. However, the opportunity presented itself unexpectedly, and they seized it to propel the brand forward.

Timing played a crucial role in the decision-making process, as Rhode was set to launch in Sephora stores. For this reason, Bieber sought out a partner with experience in navigating such partnerships. This strategic move aimed to provide the necessary infrastructure for global expansion.

The lean team at Rhode had reached its limits, and the founders realized that they required additional support to scale their business effectively. Ratner emphasized that the brand's growth potential was hindered by its small size.

With a collective decision-making process in place, Bieber, Ratner, and Ratner's husband carefully evaluated the partnership with e.l.f. Beauty. Their joint assessment led them to believe that this move would be beneficial for Rhode's future prospects.

The expansion into European markets has been a significant milestone for Rhode, with the brand now available in 19 new countries across Europe through partnerships with Sephora.

Rhode's online sales performance in these markets has also exceeded expectations, with Ratner noting that their first day of online sales surpassed total Black Friday sales for the previous year.