The beauty industry had some seismic shocks in 2025.Surprises sales, including E.l.f. Beauty’s $1 billion acquisition of Rhode and L’Oréal absorbing all of Kering’s beauty portfolio for $4.7 billion, dominated the headlines. But beneath this wave of consolidation, more profound changes were afoot.
Big and small brands alike are being forced to adapt to choosier customers and increased competition, and once white-hot brands like Drunk Elephant and Pat McGrath Labs struggled. While each company has its own unique challenges, the industry’s growth is slowing, and its reputation as recession-proof is being threatened as shoppers begin to bargain hunt.
Top Stories
1. Exclusive: The Story Behind E.l.f.’s Controversial Matt Rife Campaign. The beauty brand’s chief marketing officer Kory Marchisotto spoke to The Business of Beauty about the ad and its aftermath. “There is a big gap between our intention and how this missed the mark for some people,” she said.
2. Louis Vuitton Tests the Limits of Luxury Beauty With $160 Lipsticks. The range of 55 lipsticks, 10 lip balms and eight eyeshadow palettes will launch globally on Aug. 29 in select Louis Vuitton stores. At those prices, who’s buying?
3. Estée Lauder Companies’ Makeover Begins. In order to reverse its sales decline, the company is reportedly considering selling off poorer-performing, lower-margin brands and cutting other costs. Investors want to see the fat trimmed, and more room created for future growth.
4. The End of the Lipstick Index. After years of double-digit growth and a perception of being impervious to wider economic downturns, the beauty industry is finding that cash-strapped customers aren’t interested in ‘little luxuries.’
5. What Happened to Pat McGrath Labs? The brand founded by the legendary makeup artist nearly a decade ago is struggling. Once valued at over $1 billion, the line is worth a fraction of that today. Multiple rounds of layoffs, and signs of behind-the-scenes turmoil raise questions about what went wrong and how the business can get back on track.
6. Kids Are Having Birthday Parties at Sephora Now. Beauty retailers are playing host to skincare-obsessed tweens and teens on their special day. Can scavenger hunts, makeup tutorials and goodie bags create lifelong customers?
7. The Business of Ballerina Farm. Hannah Neeleman is the farmfluencer who broke the internet thanks to the public’s obsession with her picturesque life, career choices and family dynamics. Now, she is taking her burgeoning lifestyle empire global.
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