Playing Musical Chairs with Global Cosmetic Brands

Conglomerates are Reshuffling Everything at Once

I’ve been working in this industry for over four decades. I have watched brands rise, fall, get acquired by conglomerates that had no business acquiring them, and be quietly shelved because nobody in conference rooms had the courage to say “this isn’t working.” I thought I had seen every mutation of corporate beauty chaos.

Evidently, I have not.

What is happening right now, in this single compressed moment of early 2026, is unprecedented. Not because any one of these stories is individually shocking. We have seen bankruptcies. We have seen mega-mergers. We have seen conglomerates cleaning house. What we have not seen is all of it happening simultaneously, across virtually every major player, in what amounts to the largest coordinated portfolio reckoning this industry has ever experienced.

Let me walk you through it, because the sheer volume deserves to be laid out in one place.

Pat McGrath Labs, once valued at $1 billion, is now controlled by its lender. Pat McGrath herself has ceded a 65% equity stake to GDA Luma Capital Management as part of a Chapter 11 restructuring. She transitions from CEO to Chief Creative Officer. The brand that launched with a $40 gold pigment that sold out in six minutes is now governed by a distressed-debt investment firm. Let that land for a moment.

Meanwhile, Estée Lauder Companies is moving in two directions at once. On the acquisition side, CEO Stéphane de La Faverie just completed an 18-year courtship by agreeing to acquire the remaining 51% of the Indian luxury Ayurvedic brand Forest Essentials, a roughly $63 million-revenue business with nearly 200 stores. On the divestment side? ELC is actively marketing Too Faced, Smashbox, and Dr. Jart for sale. The color cosmetic brands are being offered as a pair. Dr. Jart is being offered separately. The message is unmistakable: the portfolio that defined their 2010s acquisition spree is being disassembled.

At LVMH, the situation is even more dramatic. Bernard Arnault’s luxury empire is reportedly weighing the sale of Make Up For Ever (which has been loss-making for eight consecutive years), the skincare brand Fresh (also loss-making), and its stake in Rihanna’s Fenty Beauty (seeking €1.5 to €2.5 billion). During the most recent earnings call, Arnault mentioned none of them. He talked about Dior lipstick sales and Louis Vuitton Beauté. The silence said everything. For those of us who watched and worked with Dany Sanz to build Make Up For Ever into one of the most respected professional brands in the world, watching it reduced to “loss-making” and “not aligned with core luxury focus” after 27 years under LVMH ownership is... well, it’s heartbreaking.

Coty continues its strategic review of the entire $1.2 billion mass color cosmetics business, including CoverGirl, Rimmel, Sally Hansen, and Max Factor, plus its $400 million Brazil operation. The review was initiated under former CEO Sue Nabi before her December departure, and is now being led by interim CEO Markus Strobel, who stepped in from Procter & Gamble on January 1. The strategic direction is clear: Coty wants to be a fragrance house. Everything else is negotiable. The problem? Finding buyers for legacy mass color brands in a market where drugstore traffic is declining, e.l.f. is eating market share from below, and prestige is pulling consumers from above.

And then there is the Kimberly-Clark/Kenvue deal, a $48.7 billion acquisition that both shareholder groups approved with overwhelming majorities. When this closes in the second half of 2026, the company that makes Huggies and Kleenex will own Neutrogena, Aveeno, OGX, and Clean & Clear. Kimberly-Clark has zero beauty infrastructure, zero beauty expertise, and zero track record in the category. The most charitable read is that they will invest in the brands and leverage their commercial execution playbook. The less charitable read is that these beauty assets are about to experience the same kind of strategic neglect that got them here in the first place.

Over in China, Yatsen Holding (the parent of Perfect Diary, Galénic, Eve Lom, and DR.WU) posted 26.7% revenue growth for FY2025 and swung to profitability in Q4 by doing something radical: it invested in skincare R&D, shifted its portfolio toward higher-margin products, and exercised actual discipline. Skincare now represents 53% of revenue, up from a color-cosmetics-heavy mix just two years ago. Gross margins hit 78.2%. In a landscape of write-downs and restructurings, Yatsen’s performance reads like a quiet rebuke to everyone else on this list.

And a comprehensive WWD analysis published today maps the full buyer landscape for 2026. The conclusion is sobering. The traditional private equity players who fueled the beauty acquisition boom of 2018 through 2022 have largely pulled back. Eurazeo shuttered its brand investment arm entirely. Carlyle, TPG, and Summit Partners are described as “less focused on beauty.” The active buyer pool has shrunk from roughly two dozen firms to a small handful. Korean strategics and a few disciplined consumer goods companies (Church & Dwight being the notable example) are the ones still writing checks.

Let me say this plainly: The beauty industry is not experiencing a correction. It is experiencing a structural realignment.

The over-capitalized brands are being recapitalized. The brands that were mismanaged under conglomerate roofs are being shown the door. The legacy mass brands that lost relevance are looking for homes that may not exist. And the buyer pool that everyone assumed would always be there, waiting with term sheets and growth capital, has thinned to a fraction of its former self.

#MyTwoCents

This is not a cycle. This is a reckoning.

The brands that will emerge from this moment in strong positions share a few characteristics:

• They have real product differentiation (not just positioning)

• They have financial discipline (not just revenue growth)

• They have founders or operators who understand that a billion-dollar valuation is not the same thing as a billion-dollar business.

For everyone else, the music has stopped, and there are no chairs left.

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Kevin James Bennett is a multiple Emmy Award-winning makeup artist, respected industry expert, cosmetic developer, and educator. He is the publisher of In My Kit®