Business of Fashion recently reported that Pat McGrath Labs has put its assets, trademarks, and name up for sale as part of a restructuring effort. The move is intended to enable the brand to move forward in a more productive environment, but it signals significant instability at a company once valued at over $1 billion following its 2018 Sephora investment. At one point the brand was pushed as a company with a higher evaluation than Kylie Cosmetics.
Declining Valuation and Investor Exit
Initial excitement around Pat McGrath Labs was fueled by artist-driven hype and limited-edition drops, with products like glitter pigment lips selling out instantly. However, the brand’s valuation has plummeted. Sienna Investment Managers, a key investor, marked down its stake by 88%, suggesting a new valuation closer to $174 million. The original investor behind the billion-dollar valuation quietly exited years ago, raising further questions about the brand’s financial health. The rapid decline in valuation is a stark indicator of changing market sentiment and shifting consumer preferences in the luxury beauty sector. Such volatility is rarely seen in brands with a decade-long heritage, underscoring the seriousness of the current situation.
Creative Stagnation and Customer Feedback
Despite Pat McGrath’s status as an industry icon, the brand has struggled to maintain momentum. Early launches were celebrated, but the product line became repetitive, with color stories dominated by roses, pinks, and mauves. Customers repeatedly called for more variety, drawing comparisons to Charlotte Tilbury’s overuse of Pillow Talk. Viral moments, such as the Victoria’s Secret Angel campaign and Glass Skin campaign, brought temporary spikes in attention but failed to establish lasting growth. The lack of sustained innovation has led to a perception that the brand is no longer listening to its core audience. In the beauty industry, where trends shift rapidly and consumers crave novelty, this disconnect can be fatal for even the most prestigious labels.
Franchise Collaborations and Quality Concerns
Pat McGrath Labs’ collaborations with franchises like Star Wars and Bridgerton have been viewed by some as short-term strategies rather than genuine creative ventures. These collaborations, often perceived as cash grabs, can indicate a brand’s struggle to innovate. Additionally, formula changes in holiday and larger palettes, aimed at appealing to a broader market, eroded the brand’s prestige reputation. Long-time fans noted a shift in quality, with newer releases lacking the luxury feel that defined the brand’s early years. This perceived dilution of the brand’s identity has contributed to declining loyalty among its original customer base.
The Broader Impact on the Luxury Beauty Market
The situation at Pat McGrath Labs highlights broader challenges in the luxury beauty market, where investor expectations and consumer demands are often at odds with creative vision. Brands that once set trends are now pressured to deliver viral hits and rapid returns, sometimes at the expense of authenticity and long-term growth. The rise and struggles of celebrity-founded beauty brands have become almost cyclical, with creative founders frequently stepping away as outside capital takes over. This pattern raises questions about the sustainability of the current beauty industry model and the future of innovation in the sector.
Pat McGrath’s New Chapter with Louis Vuitton
Amidst the uncertainty, Pat McGrath herself has taken on a major new role. This Autumn 2025, Louis Vuitton launches La Beauté Louis Vuitton, marking a bold expansion into beauty. Dame Pat McGrath is at the creative forefront as Creative Director, bringing her expertise to elevate the brand into high-end beauty.
For Louis Vuitton, this partnership signals a commitment to excellence and innovation. McGrath’s appointment is expected to set a new standard for luxury beauty, leveraging her reputation for artistry and product excellence. Her move also illustrates the shifting priorities of top creative talents, who increasingly seek environments where their vision can flourish without compromise.
Investor Influence and Brand Direction
The sale process leaves open whether Pat McGrath will remain involved with her namesake brand. Her shift to Louis Vuitton suggests a desire to pursue fresh creative opportunities, echoing industry patterns where founders lose control as investor priorities take over. The future of Pat McGrath Labs is now uncertain, with potential buyers like Estée Lauder or Coty possibly weighing the risks amid diminished valuation and creative stagnation. The outcome will likely serve as a bellwether for other luxury brands facing similar crossroads, as the industry continues to evolve in response to both market pressures and creative ambitions.
