After weeks of speculation over who would nab Pat McGrath Labs in an auction, the brand has filed for Chapter 11 bankruptcy, shifting the process to a court-supervised restructuring and extending uncertainty over its potential new ownership.
The filing, first reported by Women’s Wear Daily, was made Jan. 22 in the United States Bankruptcy Court for the Southern District of Florida, with Pat McGrath Labs estimating assets and liabilities of $100 million to $500 million. The company is authorized to continue operating during the bankruptcy process and estimates it has between 200 and 999 creditors.
Pat McGrath Labs’ Chapter 11 marks a dramatic fall from grace for the brand. In 2018, private equity firm Eurazeo Brands injected $60 million in funding into Pat McGrath Labs at a valuation of more than $1 billion. Eurazeo quietly exited its stake in Pat McGrath Labs in 2021, and Sienna Investment Managers later became a minority investor as the brand’s valuation declined. Sources told WWD that Pat McGrath Labs’ sales sank to about $50 million last year.
The brand was founded in 2015 by Pat McGrath, widely regarded as one of the most influential makeup artists in the world, whose work has appeared at fashion shows for Prada, Versace, Dior and Louis Vuitton, and it premiered in retail at luxury department store Barneys New York. Its initial product launches included eyeshadows, lip products and complexion items, and it made a splash with highly pigmented Gold 001 dust, packaged with gold sequins.
Pat McGrath Labs is carried in more than 700 retail doors worldwide, according to Business of Fashion last year. However, its retail footprint has shrunk as the brand has lost momentum. Currently, the brand is available at Ulta Beauty, Nordstrom, Bluemercury, Bergdorf Goodman, Macy’s and Sephora, where it sells around 40 makeup and skincare products priced from about $29 to more than $90.
Pat McGrath Labs’ bankruptcy process is happening as prestige makeup sales have lagged overall prestige beauty growth. Data from market research firm Circana show that, in the first nine months of 2025, prestige makeup sales rose 3% to $7.9 billion. Generally, the prestige beauty market increased 4% to $24.1 billion.
Beauty industry insiders identify a mix of pricing, product strategy and execution challenges as bedeviling Pat McGrath Labs. Speaking to Beauty Independent for an article on the brand’s future, Manessa Lormejuste, a chemist and product developer at Lorm·Co, argues it struggled to balance premium pricing with repeat purchase behavior, particularly in eyeshadow.
“Eyeshadow is a shelf-stable category that consumers don’t repurchase often,” she says, adding that the brand’s roughly $128 palettes made long-term growth difficult without stronger replenishment categories. She also notes that while the brand introduced skincare, it lacked the clinical backing and hybrid color-skincare concepts that have reshaped product development in recent years.
Others identify timing and operational clarity as especially problematic for Pat McGrath Labs. Summer D’on Bell, founder and CEO of D’on Cosmetics, says the brand’s runway-driven innovation sometimes failed to translate into commercial traction. She points to a porcelain-skin technique seen at Margiela’s spring/summer 2024 show that took nearly a year to reach shelves. “By the time it launched, the beauty cycle had already moved on,” says D’on Bell.
Brand and creative consultant Wiza Lausanne adds that, as beauty culture shifted toward skin-first routines and value-conscious luxury, Pat McGrath Labs “lacked clarity around who it was speaking to,” arguing that sustained scale requires “rigorous operational clarity alongside creative vision.”
Distressed-asset investors are now weighing whether Pat McGrath Labs can be turned around, but the field of potential makeup targets is crowded. Estée Lauder is exploring options for Too Faced and Smashbox, and Louis Vuitton is seeking to offload its 50% stake in Fenty. Beyond prestige, the mass market is brimming with potential divestitures, including brands held by Coty following its acquisition of Procter & Gamble brands.
Pat McGrath Labs retains advantages tied to McGrath herself and its relationships with key retailers. Yet, McGrath’s role in the company’s future remains unclear. Last year, she became cosmetics creative director at Louis Vuitton and helped launch the luxury makeup brand La Beauté Louis Vuitton.
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