e. The transaction is expected to close in the second quarter of ELF Beauty’s fiscal next year.While the headlines are bold, the underlying implications stretch beyond the surface. This acquisition could constitute a case study in modern branding, influencer-led marketing, and retail evolution. The strategy at play Founded in 2004, ELF Beauty has grown into a formidable force in mass beauty by disrupting norms with affordable, trend-driven products. Yet, its expansion into prestige beauty has been limited, until this year. “ELF found a like-minded disruptor in Rhode,” said Tarang Amin, ELF Beauty’s CEO and chairman. “Rhode is a beautiful brand that we believe is ready for rocketship growth.” That rocketship, however, is fueled by more than just Hailey Bieber’s curated aesthetic. Rhode generated $212 million in net sales in the 12 months ending March this year and became the number one skincare brand in earned media value (EMV) last year, a 367 per cent increase year on year. The brand is built on minimal, efficacious products, just ten SKUs to date, marketed through a hyper-engaged, online-first platform anchored by Bieber’s celebrity influence. The acquisition comes just months ahead of Rhode’s planned retail launch at Sephora in North America and the UK which denoted a significant move for both the brand and ELF, marking the latter’s first major push into Sephora’s prestige aisles. An influencer engine at work For ELF, the appeal of rhode goes beyond product innovation. Shanthi Murugan, an ecommerce expert from One Moon, sees the real value in Rhode’s marketing infrastructure. “Rhode’s power lies in its owned media ecosystem,” Murugan explained in an interview with Inside Retail.  “Hailey Bieber isn’t just the face of the brand – she is the narrative. Her authenticity drives engagement and converts at scale. Every post, every paparazzi photo, becomes brand equity. She’s selling a lifestyle,” she added. This influencer-powered engine isn’t just desirable, however increasingly essential for growth in a beauty market saturated with choice.  For Gen Z, trust and relatability often outrank institutional legacy. By acquiring Rhode, ELFbuys into not only a brand, but a streamlined content and community machine that has outperformed traditional campaigns. Financial theater or genius? Yet, not everyone sees this as a purely strategic masterstroke. In a critical LinkedIn post, Boris Zion, CEO of CM Studio+, labeled the deal “financial theater.” “ELF doesn’t own its own labs or manufacturing. It’s a glorified dropshipper operating in a high-margin space. The Rhode acquisition is a headline grab – momentum borrowed against future hope,” Zion wrote. He notes that most of the $1 billion price tag isn’t immediate cash but structured through debt and stock, meaning ELF secures short-term buzz and top-line growth without fully parting with capital. While that may excite Wall Street, Zion warns of a familiar pattern: “When the influencer stops posting, the magic fades.” In a point of fact, many celebrity-backed brands, from Kylie Cosmetics to Jessica Alba’s Honest Company, have struggled post-acquisition. The commonality being they were built for trend, not long-term independence. ELF also faces real supply chain challenges. An estimated 75 per cent of its production comes from China, exposing the brand to tariffs, freight volatility and geopolitical risk. MarketWatch reports that ELF is working to diversify suppliers and adjust pricing to offset these pressures.  The next frontier of innovation and scale Product developer and beauty scientist Manessa Lormejuste views the deal more pragmatically.  “ELF is playing chess, not checkers,” she wrote on LinkedIn. “Rhode helps them diversify into the prestige category and brings a new growth lever.” But she cautions that with only about 10 SKUs, Rhode will need to expand rapidly to remain competitive in Sephora’s crowded, innovation-hungry environment.  “Consumers already complain about the grainy Lip Treatment. With ELF’s supplier network and R&D resources, reformulations and SKU expansion are inevitable,” she posted. Lormejuste also raises questions around valuation.  “$1 billion for a non-patented, 10-product brand? That feels inflated. The valuation leans heavily on Hailey’s celebrity,” she said. Lormejuste acknowledges that if ELF can optimise costs, scale distribution and improve product quality, it could pay off in the long run.  “I wouldn’t be surprised if Rare Beauty or Haus Labs start shopping around,” she wrote. “This deal signals that the recession isn’t stopping anything in beauty.” Uniting disruptors under one roof One of the key challenges moving forward will be integration. ELF has built a strong brand identity rooted in affordable innovation and digital-first marketing. How Rhode maintains its premium positioning and founder-led authenticity while operating under a corporate umbrella will be critical. “Each brand needs a distinct voice,” Murugan said. “But they should be aligned under a shared vision – ELF’s commitment to accessible, on-trend beauty. That thread can unify the portfolio without diluting Rhode’s identity.” Hailey Bieber will remain as founder, while also taking on the roles of chief creative officer and head of innovation for Rhode. She’ll also serve as a strategic advisor to the combined companies, an unusual move meant to maintain the brand’s authentic voice. Final thoughts At its core, this acquisition is a $1 billion bet on modern marketing: the celebrity-as-brand. This is no new phenomenon, but Rhode’s success proves it’s still relevant when executed with discipline, vision and consistency. Now, the question stands: Can Rhode maintain its cultural heat as it moves from niche DTC darling to prestige retail mainstay? Can ELF deliver the operational rigor needed to scale it, without killing the vibe that made it cool? Only time will tell. But one thing is certain, in today’s beauty landscape, content is product, influence is capital and authenticity is the most valuable SKU.