Global Brands, News

Rare Beauty May Seek an IPO

According to reports, Selena Gomez’s cosmetics brand, Rare Beauty, has hired investment banks Goldman Sachs and Raymond James to prepare for potential moves in the capital market. However, insiders suggest that significant developments are unlikely to occur soon.

According to sources, the beauty brand is currently assessing various possibilities for its business but has not yet initiated a formal procedure to examine potential deal options. Additionally, insiders suggest that once the brand is prepared, it may consider pursuing an initial public offering (IPO) given its rapid growth trajectory.

According to a source familiar with the company’s performance, Rare, founded by actress and singer Selena Gomez in 2020, exceeded $400 million in net sales in the 12 months ending in February. This achievement places the brand among the top echelon within the competitive landscape of celebrity-backed brands that emerged around the same period. Only Rihanna’s Fenty Beauty, launched in 2017, has achieved higher sales. While Kylie Jenner’s Kylie Cosmetics reportedly reached over $300 million in annual revenue at its peak, demand has declined since then.

Rare Beauty has not disclosed its sales data, but reports suggest that its valuation could be at least $2 billion or possibly higher. In the recent beauty capital market, few acquisition deals are valued as high as $2 billion. Similar transactions include Tom Ford’s sale to The Estée Lauder Companies for $2.8 billion and Kering’s acquisition of Creed for $3.8 billion.