Pat McGrath Labs, an iconic name in the beauty industry, has sought Chapter 11 bankruptcy protection in the Southern District of Florida, as detailed in a petition from January 22.
On Sunday night, Women’s Wear Daily broke the news of this filing, indicating that an asset sale originally scheduled for Tuesday has been postponed indefinitely. The spokesperson for the brand confirmed that operations will continue and restructuring plans will be implemented while negotiations with creditors take place. Chapter 11 bankruptcy allows companies and their proprietors to maintain operations during this crucial period of reorganizing.
The brand has reported liabilities estimated between $50 million and $100 million. In a move to stabilize their operations, they filed emergency motions requesting $426,402 for paying critical vendors and $689,324 for covering employee wages and other compensation.
Founded by renowned makeup artist Pat McGrath in 2015, the brand once stood tall with a valuation exceeding $1 billion in 2018 after a significant investment of $60 million from private equity firm Eurazeo. However, following an immense drop in both sales and valuation, Eurazeo quietly exited their investment in 2021. More alarmingly, fellow investor Sienna Investment Managers decreased its valuation of Pat McGrath Labs by a staggering 88% in 2024, hinting at a value closer to $174 million, and has indicated plans to withdraw in 2025.
The auction set for January 27 was planned as a part of a restructuring effort, with company representatives explaining to The Business of Beauty in December that this would help Pat McGrath Labs “move forward in a productive and healthy environment.”
