expected to hit over $100 million in sales with the LVMH-owned retailer alone, whereas, in the same year, Rare Beauty reportedly generated roughly $350 million in total sales. Meanwhile, Kosas is expected to drive $120 million in net sales by the end of 2024.  Rare Beauty and Merit Beauty both launched in the last five years, while Glossier and Kosas launched in 2014 and 2015, respectively. So it’s not surprising that the people behind them are exploring their exit options, given where the brands are in their growth cycles.  According to media reports, the beauty brands have been connecting with investment banks to discuss strategy: Glossier with Morgan Stanley, Merit Beauty with Goldman Sachs, and Rare Beauty jointly hiring Goldman Sachs and Raymond James Financial. Striking while the beauty industry iron is hot An IPO would typically be viewed as a risky choice for these relatively young, single-branded companies with limited retail partnerships.  However, given the strength of the beauty market, especially for cosmetics, and the financial power of these brands in a competitive market, an IPO may be a suitable route for them to explore.  According to data gathered from a 2023 report from market research company Circana, growth in makeup eclipses every other category in the prestige beauty landscape, with cosmetics growing by an impressive 15 per cent. In fact, the beauty industry, encompassing the cosmetics, skincare, and fragrance industries, has seen a high volume of M&A activity in recent years, including Shiseido Company acquiring Dr Dennis Gross last December, Manzanita Capital buying DS & Durga in January and Puig buying Dr Barbara Sturm in January. Whereas 20 or even 10 years ago, companies like Rare Beauty or Kosas would not have been advised to do an IPO, large-scale beauty companies are now interested in developing brand portfolios that appeal to a younger, trend-savvy demographic. Why are these particular beauty brands exploring exit options en masse? Pepperdine Graziadio Business School adjunct professor and seasoned beauty executive Kimber Maderazzo noted that, in addition to their other shared characteristics, Rare Beauty, Glossier, Merit Beauty and Kosas were all founded by women. “These brands have a strong market presence and are engaged with their consumers. They have been able to identify their key target audiences and communicate strong brand values and principles that are admired and trusted by their followers,” Maderazzo told Inside Retail. Some of the values Maderazzo is referring to include minimalist but aesthetically pleasing packaging, a focus on skin-benefiting ingredients, and an emphasis on the “clean girl” or “that girl” aesthetic.  Having a visually distinct presentation and clear brand messaging enables these brands to engage with their audience and thrive in the competitive beauty market.  Ultimately, Maderazzo chalks the timing of the potential deals to the timeframe in which these brands were able to build themselves up. “These companies were built with the end in mind. The people, the strategy, and the execution were planned from the beginning and timing was included,” she said. “These brands were all founded within a few years of each other and […] have built what they intended to do, grow significant revenue and profit in a short amount of time.” Maderazzo sees this as “a sign of consumers voting with their wallets and keeping the industry active”.  “In regards to an IPO, this would be the ultimate for a beauty brand,” she said. “The public market is not usually a home for beauty businesses, it should be and I hope to see more in the future.”