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Pat McGrath Labs Files for Bankruptcy, Industry Faces Headwinds
Table of Contents
- 1. Pat McGrath Labs Files for Bankruptcy, Industry Faces Headwinds
- 2. A billion-Dollar Valuation To A Financial Restructuring
- 3. Internal Challenges And Industry Trends
- 4. Key Facts: Pat McGrath Labs Financial Trajectory
- 5. How will Pat McGrath Labs’ Chapter 11 bankruptcy filing affect its product availability and pricing for consumers?
- 6. Pat McGrath labs Files for Chapter 11 Bankruptcy Amid Cosmetic Industry Woes
new York, NY – January 26, 2026 – Pat McGrath Labs, the renowned cosmetics brand founded by the eponymous makeup artist, has initiated Chapter 11 bankruptcy proceedings. This development follows a period of restructuring efforts and signals growing challenges within the beauty industry,particularly for independent brands. The filing occurred on Monday, halting a planned auction of the company’s assets scheduled for January 27.
A billion-Dollar Valuation To A Financial Restructuring
Just eight years ago, in 2018, Pat McGrath Labs commanded a valuation of $1 billion following significant investment from Eurazeo, a French private equity firm. Tho, the company’s value has as decreased dramatically, currently estimated at $174 million. Sienna Investment Managers holds a minority stake in the brand.
The company stated it will continue operating normally while it restructures its finances. Founder and CEO Dame Pat McGrath, recently appointed creative director of Louis Vuitton’s makeup line in August 2025, will remain at the helm of her brand during this process. She has continued to actively promote products and inspire makeup styles on her Instagram account.
Internal Challenges And Industry Trends
Pat McGrath Labs has experienced internal turbulence over the years, marked by frequent leadership changes and staff reductions. Despite these difficulties, the company reported significant sales growth in 2025, according to statements made to Business of Fashion in December. This apparent contradiction highlights the complex financial pressures facing the brand.
The bankruptcy filing is part of a broader trend affecting businesses in the fashion and beauty sectors. Saks Global recently filed for bankruptcy, and other brands are struggling to maintain momentum in a shifting consumer landscape. Vogue Business has reported on the slowing growth within the beauty industry, citing increased competition and evolving consumer preferences. Black-owned brands, in particular, have been disproportionately impacted, as evidenced by the closure of Ami Colé in the summer of 2025.
