Pat McGrath Labs has filed for Chapter 11 bankruptcy protection in the Southern District of Florida, according to a petition submitted on January 22. The filing places the cosmetics company under court supervision while it restructures its balance sheet and continues operating. The move comes days before a planned public auction of the company’s assets, which has now been paused indefinitely.
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The filing was first reported by WWD, which confirmed that the asset sale scheduled for January 27 will not proceed. A spokesperson told the publication that the company intends to continue trading throughout the restructuring process. Chapter 11 allows businesses to maintain standard operations while negotiating terms with creditors, offering an alternative to liquidation.
Court filings show that Pat McGrath Labs has estimated debts between $50 million and $100 million. The company also asked the court for permission to pay about $426,000 to key suppliers and about $689,000 for employee wages and related costs.
Founded in 2015 by makeup artist Dame Pat McGrath, the brand rose quickly within the beauty industry. Its launch product, Gold 001, sold out within minutes and established the label’s reputation for high-impact formulas. Over the following years, Pat McGrath Labs gained wide recognition for its eyeshadows and lip products and attracted a global consumer base.
In 2018, private equity firm Eurazeo invested $60 million in the company, valuing Pat McGrath Labs at more than $1 billion. Eurazeo later exited its position in 2021. Financial pressure became more visible in subsequent years. In 2024, fellow investor Sienna Investment Managers marked down its investment by 88 percent, suggesting a valuation closer to $174 million. Sienna also indicated plans to exit its stake in 2025.
The paused asset sale was part of a broader plan to reorganize the business. In December, company representatives told The Business of Beauty that the sale would help Pat McGrath Labs move forward. The planned auction included assets tied to Pat McGrath Cosmetics, LLC and Pat McGrath personally. The auction organizer, Hilco Global, has since removed the listing from its website.
The Chapter 11 filing occurred one day before the auction was set to take place. Interested bidders had been required to submit offers by January 26, with the sale scheduled for January 27 via Zoom, alongside an in-person option. That entire process now remains on hold with no revised timeline announced.
In a statement included in court filings, Pat McGrath Labs said it will continue operating in the ordinary course of business while restructuring its financial framework. The company stated that it aims to forge a path toward long-term stability while maintaining its product offering and creative direction.
The bankruptcy arrives amid heightened visibility for Pat McGrath beyond her own brand. In 2024, she partnered with Louis Vuitton to launch the fashion house’s makeup line, La Beauté, where she holds the title of Creative Director, Cosmetics.
As the restructuring proceeds, the future shape of Pat McGrath Labs remains uncertain. What is clear is that the Chapter 11 filing halts the immediate sale of its assets and places the brand in a period of financial negotiation. The outcome will determine whether the company can stabilize its operations and redefine its position after a dramatic shift from its billion-dollar valuation peak.
