Glossier explores IPO while Merit Beauty mulls sale

Glossier and Merit Beauty are reportedly the latest beauty brands to be exploring options amid a recent surge in beauty M&A deals.

Glossier has hired Morgan Stanley to consider its options, including an initial public offering (IPO), according to WWD.

Meanwhile, Merit Beauty is understood to have recruited Goldman Sachs as it mulls a potential sale.

The news follows rapid growth for the two US-based beauty brands since their respective launches, with each deal likely to capture the industry's attention on the back of their success.

Sources told WWD that net revenues for Merit Beauty topped $100 million last year, while Glossier was on track to surpass $100 million in Sephora alone for its first year with the LVMH-owned retail giant. Industry sources estimate that Glossier's overall sales total around $275 million.

Given how much money Glossier has raised, sources believe an IPO may be its only option. "It seems only the earlier investors in Glossier could really make money as opposed to the later ones," one source said of a potential sale, making the case for a public offering.

Founded by Emily Weiss in 2014, Glossier was born out of Into The Gloss, a beauty website and community devoted to sharing real information with real people about beauty products.

From formulas to packaging, cosmetics to skincare, the brand was created to make beauty accessible and uncomplicated.

Meanwhile, Merit Beauty debuted during the pandemic in 2021 to address the growing demand for pared-back beauty products from the 'Millennial and up' market.

Since its launch, the brand has experienced global growth and launched in the UK last year via its own website.

The news follows reports last week that Selena Gomez is also considering the sale or an initial public offering for her viral cosmetics brand, after it was valued at $2 billion.

The actress-turned-singer is understood to have hired advisers to assess offers for Rare Beauty. However, no matter the outcome, she plans to stay heavily involved with the business.

In addition, Kosas Cosmetics was understood to be mulling a potential sale earlier this year. The skincare-infused makeup brand was said to have hired investment bank North Point to explore sale options.

The potential deals come after a number of recent acquisitions across the beauty industry, including D.S. & Durga by Manzanita Capital, Dr. Barbara Sturm by Puig, This Works by Inspirit Capital, Dr. Dennis Gross by Shiseido Company, and The Body Shop by Aurelius, which has since collapsed into administration.