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Now, the main event…

In 2018, Eurazeo Brands, the consumer investment arm of Eurazeo Global, very publicly put $60 million into Pat McGrath Labs at a $1 billion valuation. Even in an era defined by frothy valuations, this was unhinged math for a brand that, at the time, was on track to hit $40 million in net sales, according to a source close to the business. Indeed, it turned out to have been the high-water mark for the beauty firm founded by high fashion’s perennial makeup artist of choice. Next week, Pat McGrath Labs’ assets will go on the block; bids are due January 26, and a public auction will be held the next day.

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The sale is the disappointing culmination of a challenging few years for the company, defined by dramatic sales declines, investor musical chairs, manic emails from fractional leadership, a Candy Crush collaboration in 2025, and more indignities. I don’t think anyone is terribly surprised; a loss of relevance has continued to plague the brand, despite Pat McGrath’s continued knack for creating viral beauty looks on the runway. Sales have slid from a little more than $100 million in 2023, according to someone with direct knowledge of the business, to just $50 million in 2025, per a recent piece in WWD. Eurazeo quietly sold its stake in 2021. Sienna Investment Managers, the allocation arm of Belgian holding firm Groupe Bruxelles Lambert, swooped in, only to eventually write down its investment by close to 90 percent, and last year announce its intent to exit its stake. (Eurazeo Brands, by the way, is no more, according to BoF.)

To be clear, Pat McGrath Labs has not filed for bankruptcy. The brand is undergoing a restructuring via an Article 9 secured party foreclosure sale, which is more or less an asset-based fire sale. (Hilco Global’s Hilco Streambank subsidiary is managing the process.) I was told by someone with knowledge of the process that the company’s debt is significant. It’s not clear how the transaction will eventually break down—and there’s even some debate about which part of the business will extract the most value at auction. One insider felt confident that all of Pat McGrath Labs’ assets––inventory, I.P., etcetera––would be up for grabs. Another said the majority of the value comes from remaining inventory, and that the I.P. isn’t worth much. It was explained to me that the sale price will be largely contingent on the value of the inventory, and that it’s likely the new owner will turn a profit even if the products are resold at a steep discount.

And the products must be commercially viable. Viral runway makeup doesn’t equate to sales, and no one knows that better than McGrath. At the same time, I can’t imagine wanting to keep the business going without McGrath. A high-profile investor suggested that the only path to a viable business would be a licensing agreement, but even that is unlikely given that McGrath’s brand, name, and platform aren’t big enough to be licensed and streamlined without her involvement. “That’s the only exercise––it’s not ‘Let’s figure out a way to work with Pat creatively,’ this investor said. “This isn’t where Pat’s passions or interests lie. I don’t think Pat is meant to be a founder.”

This is a long shot, but there’s always LVMH. If Louis Vuitton is actually bullish on building its beauty business––and equally bullish on maintaining McGrath’s association––the company could consider buying Pat McGrath Labs, merely to prevent McGrath’s name and reputation from being tarnished. “If I were LVMH, I’d be sniffing around the process to see what I could do to make sure this doesn’t get messy,” said an insider. “If it costs a few million to make something not get messy, well then that’s a marketing expense for LVMH.”