Why Celebrity Beauty Brands Are Failing in 2026

Last updated: May 2026

Quick answers

Why are celebrity beauty brands failing in 2026? Celebrity beauty brands are failing because customer acquisition costs have outpaced fan-driven sales, and saturated shelf space punishes brands without a product moat. Launch demand driven by celebrity fame doesn’t convert to the 30-45% repeat purchase rate needed for long-term profitability, and rising tariffs plus shifting consumer spending have accelerated closures.

Which celebrity beauty brands closed in 2026? Gxve Beauty (Gwen Stefani) shut down in February 2026 after four years. Cover FX and Mally Beauty closed in January 2026 when parent company AS Beauty Group cited tariffs and market shifts. Flower Beauty (Drew Barrymore) closed in September 2025 after 13 years. Pat McGrath Labs filed Chapter 11 bankruptcy in January 2026.

Are Rhode and Rare Beauty different from the brands that failed? Yes. Rhode sold to e.l.f. Beauty for $1 billion in May 2025 after building a product-first identity around peptide-lip formulations. Rare Beauty hit a $2.7 billion valuation by building community through its Rare Impact Fund. Both created structural moats beyond Hailey Bieber’s and Selena Gomez’s celebrity, while the failed brands relied primarily on fame for customer acquisition.

Gwen Stefani’s Gxve Beauty launched at Sephora in March 2022 with a signature red lip collection, backed by VC firm New Theory Ventures and developed by Blended Strategy Group. The brand carried the kind of celebrity heat that would’ve guaranteed a five-year retail deal a decade ago. By February 2026, Gxve’s website was dark, its Sephora shelf space reassigned, and its TikTok and Instagram accounts had quietly vanished. No press release. No farewell post. Stefani’s team didn’t respond to media requests.

Celebrity beauty brands are failing in 2026 because the economics that built the category have flipped. (For context on what makes celebrity brands irresistible in the first place, the appeal hasn’t changed. The math has.) Launch-day demand still comes easy when you’ve got 50 million Instagram followers. Repeat purchases don’t. The brands folding right now share a common problem: they treated celebrity as a moat when it was really just a marketing channel.

Gxve isn’t an isolated casualty. It’s the latest name on a list that’s grown faster in the past nine months than in the previous five years combined.

Which celebrity beauty brands have shut down since 2025?

The body count is real, and it crosses tiers. These aren’t just indie labels or influencer side projects. Several of these brands had institutional backing, national retail distribution, and years of runway.

Flower Beauty closed in September 2025 after 13 years. Drew Barrymore’s mass-market brand launched at Walmart in 2012 and once generated an estimated $50 million in annual retail sales. Parent company Maesa, backed by Bain Capital, decided to exit color cosmetics entirely and shift to faster-growing categories like skincare and fragrance. Flower’s products were discounted at Ulta Beauty and pulled from CVS. The brand’s website and social channels went inactive.

Cover FX and Mally Beauty both shut down on January 22, 2026. Their parent, AS Beauty Group (founded by the original e.l.f. Cosmetics founders), cited tariffs and a shifting global market. Cover FX, founded in 1999 by MAC Cosmetics co-founder Victor Casale, had seen gross sales decline from roughly $60 million in 2018 to an estimated $20 million by the time AS Beauty acquired it in 2022. Mally Beauty, launched by celebrity makeup artist Mally Roncal on QVC in 2005, had already filed Chapter 11 bankruptcy once before in 2015.

Gxve Beauty confirmed its closure on February 18, 2026, just four years after launching. Sephora stopped carrying the products at the start of the year.

Pat McGrath Labs filed Chapter 11 bankruptcy on January 22, 2026, days before a scheduled asset auction. The brand, once valued at over $1 billion by Eurazeo in 2019, had taken a $17.5 million loan from GDA PMG Funding in early 2025 and couldn’t refinance. A Florida judge approved the bankruptcy exit in April 2026, with GDA Luma taking control. Pat McGrath stayed on as chief creative officer but transferred her equity.

Malin+Goetz entered UK administration in January 2026, closing all seven London stores and its local head office. Seventy-two jobs were lost. The premium grooming and skincare brand continued selling through third-party retailers like Liberty and John Lewis but abandoned its direct retail footprint.

That’s six brands in nine months. The pattern isn’t random.

Why are celebrity beauty brands failing?

The structural explanation comes down to three forces hitting at once: acquisition economics, market saturation, and the licensing trap.

Customer acquisition costs have broken the model. The average beauty e-commerce CAC hit $127 in 2026, according to industry benchmarks from Eightx, up 60% from five years ago. Celebrity brands were supposed to be the exception. A famous face was the built-in acquisition channel. But that advantage has eroded. When every other beauty launch is celebrity-backed, no single celebrity cuts through the noise. Channels like TikTok marketing have democratized beauty discovery, making it harder for any single famous face to dominate attention. There are more than 100 active celebrity beauty lines competing for the same Sephora and Ulta shelf space.

The math gets worse at the retention layer. A healthy beauty brand needs a 30-45% repeat purchase rate to sustain itself. Celebrity brands that rely on fame for first purchases often can’t convert those buyers into loyalists. The product has to do that work, and many of these brands launched with me-too formulations that didn’t differentiate from what was already on the shelf.

The market is oversaturated. Beauty industry M&A data from Kline Group shows that 2025 was defined by fewer, bigger, more strategic deals. VCs and strategic acquirers have stopped writing checks for celebrity beauty launches that can’t demonstrate product differentiation and margin defense. The era of “famous person + product line = guaranteed funding” is over. Investors now underwrite durable brands, not famous faces. The same pattern is playing out in side hustle trends for 2026, where creator-led commerce has shifted from personality-driven to product-driven.

The licensing model is a trap. Most celebrity beauty brands operate through licensing deals where the celebrity lends their name and image in exchange for royalties, typically 3-8% of net sales. The celebrity doesn’t own the brand. They don’t control the supply chain, the retail strategy, or the product roadmap. When the parent company (like Maesa or AS Beauty) decides to exit a category, the celebrity has no power. Drew Barrymore didn’t choose to close Flower Beauty. Maesa did.

Tariffs changed the math overnight. AS Beauty explicitly cited tariffs as a factor in closing Cover FX and Mally Beauty. Beauty products imported from China and Southeast Asia face tariff rates that have climbed since 2024, compressing already-thin margins for brands that couldn’t absorb the cost increase or pass it on to price-sensitive consumers. Premium brands with strong pricing power (Rare Beauty charges $23 for its blush, and customers don’t blink) can absorb tariff pressure. Brands competing on price at Walmart and CVS can’t.

Coty’s experience with Kylie Cosmetics tells the cautionary tale from the investor side. Coty paid $600 million for 51% of the brand in 2019, valuing it at $1.2 billion. By 2022, Coty had recorded $31.4 million in impairment charges. Sales had dropped from $273.8 million at retail in 2019 to $221.8 million by 2022, a 20% decline. Direct-to-consumer sales through Kylie’s websites fell nearly 80% from their 2017 peak.

How did the celebrity beauty brand bubble form?

The boom started around 2016-2017, when Kylie Jenner proved a celebrity could generate $420 million in 18 months through direct-to-consumer sales and Instagram hype. Fenty Beauty launched in September 2017 and did $100 million in its first 40 days. VCs and beauty conglomerates took notice. Between 2018 and 2022, new celebrity beauty launches averaged roughly one every two weeks.

The playbook seemed simple. Sign a celebrity with a large social following. Develop a product line in 6-12 months using a turnkey manufacturer. Launch at Sephora or Ulta with a PR blitz. Ride the celebrity’s organic social reach to drive launch-day sales. Use the launch numbers to raise a Series A or secure a strategic partner.

The problem: every brand was running the same playbook against the same consumer. Sephora shoppers faced dozens of celebrity-backed brands all competing for the same shelf space, all using the same contract manufacturers, and all relying on the same Instagram-to-checkout funnel. The brands that launched in 2017-2019 had first-mover advantage. By 2022, the playbook had been copied so many times that launch-day spikes got smaller and post-launch retention got worse.

What separates the celebrity brands that survive?

Three brands keep getting cited as the exceptions: Rhode, Rare Beauty, and Fenty Beauty. They aren’t just surviving. They’re setting the benchmarks. The difference isn’t luck or follower count. It’s structure.

Rhode is the clearest case study. Hailey Bieber launched the skincare brand in June 2022 with a product-first strategy: peptide lip treatments and barrier-repair moisturizers positioned at accessible price points ($29-$38). In May 2025, e.l.f. Beauty announced a definitive agreement to acquire Rhode for $1 billion, split as $600 million in cash, $200 million in stock at closing, and up to $200 million in earnouts over three years. Bieber held equity, not a licensing deal. She controlled product development. The brand’s identity was built around the products, not the celebrity. People bought the Peptide Lip Treatment because it worked, not because Bieber endorsed it.

Rare Beauty built community as its moat. Selena Gomez launched the brand in September 2020, and by October 2025 it had reached a $2.7 billion valuation. Revenue hit $400 million in net sales in the twelve months ending February 2024. In February 2026, Rare Beauty launched at all 1,500+ Ulta Beauty stores and broke Ulta’s all-time record for launch-day sales. Gomez holds a majority stake, estimated at 51%. The Rare Impact Fund, which channels 1% of sales to mental health services, created a mission-driven identity that transcended Gomez’s personal fame. Customers became community members, not just buyers.

Fenty Beauty proved the model early. Rihanna launched with LVMH’s Kendo Brands in 2017, leading with 40 foundation shades when most competitors offered 15-20. That product decision, not Rihanna’s celebrity, created the brand’s defining characteristic. Fenty generated over $600 million in annual revenue as of late 2025. But even Fenty shows cracks: LVMH is exploring a sale of its 50% stake, reportedly valued at $1-2 billion. Forbes noted a $400 million decline in Rihanna’s estimated wealth, attributed to flat sales and executive departures at Savage X Fenty.

What does the celebrity beauty brand shakeout mean for new founders?

The shakeout doesn’t mean celebrity beauty is dead. It means the minimum viable product just got a lot higher.

Cardi B launched Grow-Good Beauty in partnership with Revolve Group in 2026, a haircare line built around Fiberlace technology. The structure matters: Cardi isn’t licensing her name. She’s building a product line with genuine IP (the Fiberlace formula) and distribution through a partner that handles logistics while she retains brand equity. Whether Grow-Good succeeds or fails will test whether the post-shakeout playbook actually works. (The celebrity-founder model isn’t limited to beauty, either. Lauren Sanchez built her career across media, aviation, and publishing before marrying into the Bezos fortune.)

Sydney Sweeney’s SYRN took a different approach: capsule drops with Coatue Management backing, treating each collection as a limited-run product with built-in scarcity. That’s the opposite of the old celebrity beauty model, which flooded retail with SKUs and hoped fame would sell through inventory.

The pattern from the survivors suggests three rules for any celebrity considering a beauty launch now:

Own the equity. Licensing deals give the celebrity no control and no upside beyond royalties. Rhode, Rare Beauty, and Fenty Beauty all gave their founders meaningful ownership stakes. When Hailey Bieber sold Rhode, she captured the $1 billion in value. When Drew Barrymore’s Flower Beauty closed, Maesa made the decision and Barrymore had no say.

Build a product moat. The product has to stand alone without the celebrity’s name on it. Rhode’s Peptide Lip Treatment became a cultural product. Rare Beauty’s Soft Pinch Liquid Blush went viral on its own merits. Gxve’s red lipstick, while fine, didn’t offer anything Sephora shoppers couldn’t get from 30 other brands at the same price point.

Earn repeat purchases. A celebrity can generate a first purchase. Only the product generates the second one. With beauty CAC at $127 and rising, brands need that 30-45% repeat purchase rate to survive. The brands that hit it did so through genuine product performance and community, not celebrity appearances on Instagram.

Is celebrity beauty dead or just resetting?

It’s resetting, not dying. The numbers tell the story. Five of the top 10 beauty brands by Brand Vitality Score are still celebrity-founded. Rare Beauty broke Ulta’s launch-day record in February 2026. Rhode’s $1 billion exit proved a celebrity beauty brand can generate real enterprise value. The category isn’t collapsing. The bar is rising.

What’s dying is the 2018-2022 playbook: famous person announces beauty line, VC writes a check based on follower count, brand launches at Sephora with 40 SKUs, celebrity posts about it for six months, sales plateau, brand quietly folds three years later. That cycle is broken.

The replacement playbook looks different. Fewer SKUs. Genuine product differentiation. Founder equity, not licensing royalties. It’s the same principle that shapes one-person businesses: own the asset, don’t rent the audience. Community infrastructure that outlasts any single product launch. Distribution partnerships that handle logistics without stripping the celebrity of brand control.

The celebrity beauty brands closing in 2026 aren’t evidence that fame doesn’t sell. They’re evidence that fame alone doesn’t keep selling. The brands that understood that distinction years ago are the ones now worth billions. The ones that didn’t are the ones shutting down their Instagram accounts in the middle of the night.