Pat McGrath Labs secures investment after bankruptcy filing

US-based financial firm GDA Luma has announced a $30 million investment in Pat McGrath Labs, weeks after the beauty brand filed for bankruptcy, marking the start of what the companies describe as a new phase of stewardship and long-term growth.

A bankruptcy court in Miami approved the transaction, which provides $10 million in new debtor-in-possession financing and commits an additional $20 million in post-emergence working capital.

Under the terms of the deal, GDA Luma will assume a controlling interest in the company upon its exit from Chapter 11. Founder Pat McGrath will retain a "significant" equity stake and transition to Chief Creative Officer, maintaining oversight of the brand’s creative direction.

In a statement, GDA Luma said it is approaching the investment with respect for the brand’s legacy, alongside the operational focus and strategic approach of a global investor with experience in repositioning established brands.

"Together, Pat McGrath Labs and GDA Luma are committed to a future defined by uncompromising quality, desirability, and relentless innovation - reinforcing the brand not only as a trendsetter, but as a house that defines the direction of beauty itself," it read.

The agreement includes a pipeline of product launches beginning in the first quarter of 2026, aimed at supporting renewed creative and commercial momentum across categories. It also intends to strengthen relationships with key retail partners globally to support long-term growth.

The investment follows Pat McGrath Labs’ filing for Chapter 11 bankruptcy protection in the Southern District of Florida, one day before its assets were scheduled to be auctioned publicly on 27 January 2026 as part of a sale process.

The company had previously said it was undertaking restructuring and recapitalisation efforts to align its financial structure with its long-term strategy.

Founded in 2015, Pat McGrath Labs gained prominence for its artistry-driven approach to beauty, particularly its high-impact eyeshadows, bold lip products and runway-inspired launches. In recent years, the company has faced operational challenges, leadership changes and workforce reductions.

Uncertainty around the brand’s direction increased after McGrath was appointed Creative Director of La Beauté, the debut cosmetics line from Louis Vuitton, raising questions about her future involvement in her namesake brand.

Despite these challenges, the company said that sales had increased since the start of 2025, citing strong momentum heading into the new year.