The landscape of beauty mergers and acquisitions (M&A) in 2025 has settled into a striking dichotomy, characterized by high-stakes triumphs and strategic retreats. On one side, the market witnessed blockbuster, billion-dollar valuations for high-growth, culturally relevant brands, confirming beauty’s status as a resilient, premium asset class. Deals such as E.l.f. Beauty’s $1 billion acquisition of Hailey Bieber’s Rhode, L’Oréal’s $1.1 billion grab of clinical skincare favorite Medik8, and Church & Dwight’s purchase of Touchland for up to $880 million underscored the frenzy for red-hot assets.
Yet, mirroring this fervor is a burgeoning market for distressed assets—once-buzzy brands that have stalled, struggled with scaling, or failed to integrate successfully under large corporate umbrellas. Sales of brands like the aesthetician-founded Kate Somerville and the color-focused Nudestix exemplify this opposite extreme, revealing a void in the middle market and signaling a crucial strategic realignment among industry giants.
Industry experts widely anticipate that this trend of distressed sales will accelerate. Major beauty conglomerates, having aggressively expanded their portfolios over the last decade, are now focused on optimization and efficiency. This process, often termed “indigestion,” involves shedding underperforming assets to streamline operations and refocus capital on core growth engines.
“There’s a significant amount of portfolio indigestion taking place among the larger strategics,” noted Andrew Charbin, managing director of consumer investment banking at PricewaterhouseCoopers. “Many of them simply added too many brands to their roster in the five to ten years leading up to the 2021 M&A peak, often across disparate channels, leading to operational complexity that is no longer sustainable in a tightening market.”
This strategic clean-up is already manifesting in high-profile rumors and confirmed divestitures. The Estée Lauder Companies (ELC), for instance, has been widely speculated to be exploring the potential sale of several brands acquired during its earlier growth phase, including Too Faced, Smashbox, and the K-beauty giant Dr.Jart+. Similarly, reports indicate that LVMH Moët Hennessy Louis Vuitton is considering strategic options for Rihanna’s Fenty Beauty. Furthermore, the assets of Pat McGrath Labs, a brand once valued at $1 billion, were officially marketed for sale in December, ending years of speculation regarding the future of the luxury makeup house.
This steady flow of available, though troubled, brands has created a fertile environment for a new class of specialized buyers. These acquirers range from agile private equity firms to hands-on operational groups, all looking to capitalize on mismanaged potential. Their thesis is straightforward: many of these brands possess solid foundational elements—strong gross margins, brand recognition, and a dedicated customer base—that simply require surgical intervention and operational right-sizing to return to profitability and scale.
Ilya Seglin, managing director at Cascadia Capital, highlighted this mindset: “There are buyers looking at these underperforming brands and concluding, ‘There’s still life in these assets.’ As long as the underlying economics, particularly the gross margin, are sound, these specialized firms can introduce the operational rigor needed to generate cash flow and pave the way for a lucrative future exit.”
Here, we profile five key firms leading the charge in beauty’s growing universe of distressed acquirers, demonstrating the diverse strategies employed to resurrect these promising castoffs.
1. AS Beauty: The Operational Reinvigorator
Founded: 2019
Key Brands: Laura Geller Beauty, Bliss, Julep, Mally Beauty, CoverFX
AS Beauty, a New York-based powerhouse exceeding $500 million in size, was established by E.l.f. Beauty veterans Joey and Alan Shamah, alongside Victor and Ralph Azrak. Their core competency is the surgical revitalization of brands that have suffered from stalled growth or failed integrations.
Joey Shamah articulated the firm’s strategy: “Whether it’s a divestiture from a major strategic or a brand struggling under private equity ownership, we believe we can successfully scale and grow these businesses, both digitally and at retail, because our focus is entirely on operational excellence.”
The AS Beauty portfolio is anchored by Laura Geller Beauty and the skincare brand Bliss, acquired in 2023. The company’s growth model rejects the industry trend of chasing Gen Z, instead focusing strategically on the often-overlooked Gen X and Baby Boomer demographics. They have aggressively accelerated online distribution, particularly through Amazon, and successfully placed Laura Geller on key retail platforms like Ulta.com and Sephora.com this year.
This focused execution yielded impressive results: AS Beauty achieved 30 percent growth in 2025, following a monumental 100 percent surge the year prior, with online channels driving the majority of sales. Furthermore, international expansion is a priority, with the U.K. now comprising 15 percent of the business. While they successfully manage multiple brands, the company maintains discipline; Shamah confirmed that smaller, less scalable assets like Julep, Mally, and CoverFX may be "sunsetted" over the coming year to concentrate resources. AS Beauty remains open to future acquisitions, targeting brands with revenues upward of $50 million that possess a historical “reason for being.”
2. Windsong Global: Special Situations and Carve-Outs
Founded: 2006
Key Brands: JVN Hair, Pipette, KVD Beauty
Windsong Global, founded by William Sweedler, operates as a consumer-focused investment firm specializing in “dislocation, carve-outs, and special situations.” Sweedler emphasized that Windsong operates as “hands-on operators—not passive investors,” aiming for returns driven by operational turnaround rather than financial engineering.
Their expertise was starkly tested and proven during the 2023 bankruptcy of biotech firm Amyris’s beauty division. Windsong successfully acquired the Amyris-incubated JVN Hair (co-founded by Jonathan Van Ness) and Pipette (a baby and kids’ skincare line) in an auction for a combined $3 million. This was swiftly followed in September by the acquisition of makeup brand KVD Beauty from LVMH’s Kendo Beauty incubator.
The Amyris turnaround is a masterclass in operational recovery. Sweedler revealed that at the time of acquisition, JVN and Pipette were hemorrhaging money, with combined losses exceeding $40 million. Within just one year under Windsong’s management, the brands achieved a small profit, which doubled in size during the second year.
Teresa Lo, President of Windsong’s Belle Brands, explained the core difference: “Running a consumer portfolio is fundamentally different from running a biotech firm. We gained control over the supply chain, warehousing, and shipping costs. In many cases, it was as simple as negotiating better terms with key vendors.” Windsong is confident that KVD Beauty, currently an eight-figure business, can be restored to its former glory of over $100 million in revenue, riding the resurgence of expressive makeup trends.
3. Auréa Group: The Swift Stabilizer
Founded: 2021
Key Brands: The Body Shop, Dcypher
Auréa Group, co-founded by Mike Jatania and Paul Raphaël, has quickly made a name for itself by tackling one of the beauty industry’s most complicated turnarounds: The Body Shop. Auréa acquired the global ethical beauty giant in 2024 from Aurelius, which had placed the company into administration earlier that year after only a brief period of ownership.
Auréa’s intervention proved dramatically effective. The firm stabilized The Body Shop and returned it to profitability within three months of the acquisition. Raphaël explained that the recovery was based on immediate, high-impact operational fixes, addressing what he called the “low-hanging fruits” of the cost base. This included rationalizing bloated IT expenses and consolidating the U.K.-based company’s two headquarters down to one.
Beyond cost-cutting, Auréa has focused on expanding distribution. Bringing The Body Shop to Amazon this year marked a crucial digital shift. While the brand remains heavily reliant on its vast brick-and-mortar network (over 1,500 global stores), Auréa aims to boost online sales significantly, targeting 30 to 50 percent of the total business.
In addition to The Body Shop, Auréa maintains a diverse investment portfolio including Herbivore Botanicals, Dcypher, and Scandinavian Biolabs. In 2024, the group led a Series B funding round for Herbivore Botanicals, another 2010s-era brand seeking a comeback, evidenced by its recent launch at Ulta and a new 15-piece body care collection in December. Auréa plans to maintain its investment pace of approximately two deals per year, with a continued focus on beauty, wellness, and the burgeoning longevity space.
4. Rare Beauty Brands (RBB): Niche Agility Over Scale
Founded: 2011
Key Brands: Patchology, Kate Somerville, Dr. Dana
Rare Beauty Brands (RBB), founded by Chris Hobson, successfully rescued Kate Somerville, a high-end skincare brand, from Unilever earlier this year. The acquisition was a strategic win for RBB, whose portfolio already included Hobson’s Patchology and the nail brand Dr. Dana.
Hobson was particularly attracted to Kate Somerville’s clinic-born heritage and strong market positioning. His strategy for revival centers on reconnecting the brand to its clinical roots and elevating its hero line, ExfoliKate, a range of premium cleansers and treatments.
Hobson articulated the fundamental difference between specialized operators and behemoth strategics: “Big strategics excel at managing $100 million-plus brands through process. When you deal with a smaller brand, success is less about rigid process and more about creative flair and agility—less about scale.” RBB believes it can inject this necessary agility back into the brand, ensuring it caters effectively to its core consumer: the affluent, highly engaged skincare enthusiast.
Industry estimates place RBB’s gross revenue above $50 million, with Patchology currently slightly larger than the newly integrated Kate Somerville business. While the immediate focus is on flawlessly integrating the Kate Somerville team and product lines, Hobson confirms that RBB will "be acquisitive in the years ahead," seeking assets that fit their model of operational transformation.
5. American Exchange Group (AEG): Masstige Market Expansion
Founded: 2008
Key Brands: Indie Lee, Urban Skin Rx, AX Beauty Brands (formerly HatchBeauty)
Primarily known for its accessories and apparel portfolio (which includes Aerosoles and Ed Hardy), American Exchange Group (AEG) made a decisive entry into the beauty sector in 2023. They first acquired the group of brands formerly known as HatchCollective—rebranding them as AX Beauty—which includes NatureWell, Txtur, and Orlando Pita Play.
AEG rapidly built out its beauty arm, focusing heavily on the masstige market. This strategy was bolstered by the acquisition of clean skincare brand Indie Lee in 2024, followed by the aesthetician-founded Urban Skin Rx in 2025. This aggressive expansion quickly yielded results; the beauty division achieved an estimated $80 million in net sales in 2024.
AEG’s strategy demonstrates how established companies in adjacent consumer sectors can leverage their operational infrastructure (supply chain, distribution, retail relationships) to efficiently absorb and scale distressed or mid-sized beauty brands. By focusing on accessible, high-quality products within the masstige category, AEG is positioning its beauty division as a significant growth pillar alongside its fashion ventures.
The rise of these turnaround specialists confirms that the beauty M&A market, while highly selective, remains vibrant. The shift reflects a maturing industry where the promise of a brand’s legacy is no longer enough; operational efficiency, disciplined resource allocation, and a deep understanding of the core consumer are paramount. As major conglomerates continue to shed their “indigestion,” these agile acquirers stand ready, armed with expertise and capital, to unlock the hidden value in beauty’s promising, yet struggling, assets.