Once Valued At $1 Billion, Making Its Founder The Richest Makeup Artist On Earth, Pat McGrath Labs Just Filed For Bankruptcy

Yesterday, Pat McGrath Labs quietly filed for Chapter 11 bankruptcy protection in the United States. For a brand that was once celebrated as a billion-dollar unicorn and held up as the gold standard for "self-made" beauty success, the filing marks a stunning reversal.

At its peak in 2018, Pat McGrath Labs was worth more than $1 billion after selling a small minority stake to French investment firm Eurazeo Brands. That valuation briefly placed McGrath among the richest self-made women in fashion with a net worth estimated at $700-800 million. Unlike influencer-driven beauty startups, McGrath's rise was rooted in decades of editorial dominance, runway authority, and creative credibility. The valuation was not built on social media followers or celebrity adjacency. It was built on scarcity, prestige, and belief in McGrath's singular creative power.

But valuation is not the same thing as durability.

A Unicorn Built On Scarcity And Hype

Pat McGrath Labs launched in 2015 with a now-famous experiment: just 1,000 units of a single $40 gold pigment called "Gold 001," sold exclusively online. The product sold out in six minutes. That moment helped establish the brand's defining traits—limited drops, theatrical packaging, and an aura of exclusivity borrowed directly from couture fashion.

The strategy worked. The brand developed a cult following, expanded into Sephora, and raised roughly $88 million from outside investors. By mid-2018, Eurazeo's investment implied a valuation north of $1 billion, instantly elevating Pat McGrath Labs into the rarefied air of beauty unicorns. It was generally understood that Pat owned at least 70% of her brand, giving her a paper net worth of $700 million.

For years, that valuation took on a life of its own. It was repeated endlessly in headlines, social media posts, and think pieces about "self-made" success. But behind the scenes, the business struggled to scale in a way that matched its creative ambition.

The Cracks Begin To Show

The pandemic accelerated shifts that were already underway in beauty. Consumer tastes moved toward minimalism, skincare, and utility. Pat McGrath Labs, built around maximalist artistry and runway fantasy, began to feel misaligned with the moment.

Operational issues compounded the problem. Former employees have described a chaotic internal culture, marked by late-night approvals, constant pivots, and decision-making processes that mirrored the fast-paced fashion calendar but proved difficult to sustain as a global consumer brand. Layoffs followed. Retail placement shrank. Leadership churn became routine.

Investors noticed. Eurazeo quietly exited its position. In 2021, Belgian investment firm GBL acquired a 14.4% stake through its Sienna Investment Managers division for $183 million. By 2024, GBL had written that stake down by 88%, valuing it at roughly €21.5 million and implying a total company valuation closer to $150 million.

Getty Images

Sales, Debt, And The Bankruptcy Filing

By the time Pat McGrath Labs filed for Chapter 11 in January 2026, industry sources estimated annual sales at roughly $50 million. That number is not insignificant, but it is nowhere near enough to support the cost structure, debt load, and expectations attached to a former unicorn.

The filing came just weeks after reports that the company was being actively marketed for sale, with a secured lender planning an auction of the brand's assets. That auction was postponed indefinitely once bankruptcy proceedings began. In a statement, the company said it would continue operating while restructuring its balance sheet.

Pat McGrath Moves On

Importantly, Pat McGrath, the artist, never stopped being in demand. In 2025, she was appointed Creative Director of Makeup for Louis Vuitton's new beauty division, La Beauté Louis Vuitton. The move raised eyebrows at the time, but in hindsight, it looks like a clean pivot away from the day-to-day burden of running a distressed consumer brand.

McGrath remains one of the most influential figures in beauty history. She is a Dame of the British Empire, the first makeup artist ever to receive that honor, and a creative force whose work reshaped modern fashion aesthetics. None of that disappears because her company filed for bankruptcy.

But financially, the outcome is unavoidable. A business once touted as a billion-dollar juggernaut is now being restructured under court supervision. The paper wealth that once placed McGrath among fashion's richest figures has evaporated, leaving a far more grounded reality behind.