Pat McGrath Labs, once celebrated as a billion-dollar beauty unicorn, filed for Chapter 11 bankruptcy protection in January 2026, marking a dramatic financial reversal. For a brand that elevated McGrath into the upper echelon of fashion wealth, the filing prompts a clear question: what does this mean for her paper fortune, the valuation of her brand, and the control she retains over her assets?
Wealth Origin: Building a Billion-Dollar Beauty Brand
Pat McGrath’s financial ascent began with decades of editorial dominance and runway authority rather than social media hype. Launching Pat McGrath Labs in 2015, the brand created scarcity-driven products like the $40 gold pigment "Gold 001," limited to 1,000 units, which sold out in six minutes online. These early successes set the tone for a strategy of exclusive drops, theatrical packaging, and couture-level branding, establishing a devoted following.
The company expanded into Sephora and attracted significant investment. In 2018, French firm Eurazeo Brands acquired a minority stake, valuing Pat McGrath Labs at over $1 billion. At the time, McGrath reportedly retained at least 70% ownership, giving her a paper net worth of $700 million. Unlike influencer-led ventures, McGrath’s wealth was tied to creative credibility, brand scarcity, and intellectual property, not celebrity adjacency.
Pat McGrath at work, bringing her iconic beauty techniques to life on a client.
Change Over Time: From Unicorn Valuation to Bankruptcy
While the $1 billion valuation was celebrated in headlines, the underlying business faced structural pressures. Consumer tastes shifted during the pandemic toward minimalism, utility, and skincare, leaving the maximalist, runway-focused Pat McGrath Labs misaligned with market demand. Internal operational challenges — including chaotic approval processes, late-night decision-making, and frequent pivots — compounded the difficulty of scaling globally.
Investors reacted. Eurazeo exited quietly, and Belgian firm GBL acquired a 14.4% stake through Sienna Investment Managers in 2021 for $183 million, later writing it down 88% by 2024, valuing the brand at roughly €21.5 million. By the time of the Chapter 11 filing in January 2026, annual sales were estimated at $50 million, insufficient to cover debt obligations and operational costs associated with a former unicorn-level brand.
Control: Who Owns Pat McGrath Labs Now?
Despite the bankruptcy filing, Pat McGrath maintains significant influence over her assets. Chapter 11 allows the company to continue operating while restructuring under court supervision, giving McGrath and executives a chance to renegotiate debt and manage the business. McGrath herself has pivoted professionally, taking the role of Creative Director of Makeup for Louis Vuitton’s La Beauté division in 2025. This position demonstrates that while her company faces financial challenges, her personal brand and creative authority remain intact.
Ownership is now a combination of secured lenders, investors, and McGrath’s retained equity. Exact percentages post-restructuring have not been publicly disclosed, but the bankruptcy makes clear that control over cash flow, brand licensing, and intellectual property is critical for survival in this phase.
Miley Cyrus showcases Pat McGrath’s makeup, exemplifying the brand’s star-studded influence and cult status.
Current Picture: What the Wealth Means Today
Today, Pat McGrath’s wealth is a more grounded reflection of reality. Paper valuations above $700 million no longer exist. The brand is being restructured under court supervision, and investors now see a total company value closer to $150 million, a steep decline from its peak.
However, McGrath herself continues to earn from creative roles, licensing, and ongoing royalties, meaning her personal financial standing, while reduced in headline terms, still positions her among the most influential figures in beauty. Her professional pivot demonstrates resilience, strategic adaptation, and a focus on long-term creative capital rather than headline net worth.
People Also Ask: Pat McGrath Financial Insights
How did Pat McGrath’s early product strategy create financial value?
The brand’s initial scarcity-driven drops, like Gold 001, established high perceived value, leading to rapid sell-outs, strong media coverage, and investor interest, forming the foundation of McGrath’s wealth.
What caused the decline from $1 billion to $150 million valuation?
Shifts in consumer trends, internal operational issues, and investor exits caused a mismatch between brand expectations and market reality, ultimately reducing the company’s market value.
Does Pat McGrath still control her intellectual property and creative brand?
Yes. While the company operates under Chapter 11, McGrath retains significant influence over branding, product development, and licensing, ensuring her creative authority remains intact despite financial restructuring.
