What Happened to Pat McGrath Labs?

0:07Hello and welcome to The Debrief from the Business of Fashion, where each week we delve into our most popular BOF professional stories with the correspondents who created them. I'm senior correspondent Sheena Butler-Young. And I'm executive editor Brian Baskin. Picture in your head a memorable beauty moment from a fashion show anytime in the last 30 years, and there's a very good chance you're picturing something dreamed up and probably applied directly to the model's face by Pat McGrath. The legendary makeup artist has been the go-to for luxury brands looking to make a statement on the runway, in ads, and on magazine covers since the early 1990s.

0:45Which is why what has happened to her own brand is so strange. McGrath can make a credible claim to have kicked off the last decade of makeup artist and celebrity-fronted beauty brands when she launched Pat McGrath Labs in 2015. Within two years, she had a global distribution deal with Sephora and a private equity investment at a$1 billion valuation. But Pat McGrath Labs is worth barely one-tenth of that today and has seeded shelf space at Sephora to new arrivals. The brand has held multiple rounds of layoffs and a veteran beauty executive brought in to turn things around, exited after just nine months, writing to his team, the environment that I had stepped into was not exactly what was depicted to me.

1:28I think no one really had the proper grip of the full situation. The Business of Beauty's Brennan Kilbane spoke with multiple former employees and collaborators for his recent piece, What Happened to Pat McGrath Labs. He joins us now along with the Business of Beauty executive editor, Priya Rao. Hi, Priya. Hi, Brennan. Welcome to the Debrief podcast. Hi, guys. It's so great to be here. Hi, guys. Thank you so much for having us. So I don't say this lightly, but Pat McGrath is a true icon in the makeup industry. Brennan, your recent article spoke on her being makeup's mother. Talk to us about how she earned that designation.

2:02What were those early years of her career like? Well, first of all, I totally agree with you, Sheena. I think the word icon is probably overused, but in Pat McGrath's case, it's probably an understatement. Pat earned the nickname mother during the early part of her career in the 90s when she was coming up in London with all of these makeup and fashion and beauty greats like Guido Paolo and Kate Moss. And she also identified with the concurrent ballroom scene at the time and sort of adopted that moniker, being called Mother and her fans and her friends being called her children and sort of being the mother of the house of McGrath.

2:37There's also probably no makeup artist who is more associated with the fashion industry than Pat McGrath. And that's because since the 90s, since she earned this nickname of Mother, she has been backstage basically every fashion season, plus couture, plus, you know, little events for whoever needs them. She has relationships with designers. And she's still, you know, to this day, even though she has become this icon, this larger than life figure, you know, the only makeup artist who is known mononymously as Pat, she's still backstage working and she's doing Anna Sui. She's doing Versace. She's doing the shows that she always does.

3:13And that's 50 shows a season, right? So So we're talking hundreds, maybe even thousands of shows over her career. Yes, it's impossible to count. It's possible to count, but we won't. We're not going to do that now. Can you tell us about a couple of her most memorable looks? Yeah. Pat McGrath has done so many iconic things over the course of her career. She's very, very well known for her 90s ID covers, as well as these kinds of more theatrical approaches to runway makeup. You know, one example that comes to mind is these bejeweled masks she did for Givenchy in 2013 that looked like African masks that were made of jewels.

3:45And then I think the most recent example of this was last year's Maison Margiela couture presentation designed by John Galliano. Pat did this otherworldly glass skin as it's now known, but that really doesn't even begin to cover it. It was this sort of otherworldly plasticine, almost doll-like sheen over these kind of coquettishly made up faces that was probably the most viral makeup look of her career. So she is an innovator. She's a legend. She's all these things that we've probably said ad nauseam at this point. What I thought was interesting, though, when she was announced as the beauty director for Louis Vuitton a couple of weeks ago, I was looking around on the blogs and I saw that announcement show up outside of fashion, outside of beauty in places like the Shade Room or Lipstick Alley.

4:33And what I found interesting in the comments is that a lot of people were calling out that they did not know that Pat McGrath was Black. And so I'm curious, Priya, you know, she came of age in a certain era. She represents so much to makeup artists everywhere. How much did she lean into that identity? How much do her products speak to her identity as a Black woman? I mean, I think that obviously Pat McGrath is a Black woman, but I don't think that identity ever came up in her work or in her art. I think that she came up at a time where the fashion industry and the beauty industry was largely led by white creative directors and models and founders.

5:06And I think that what she did was create otherworldly and astonishing looks, but it had nothing really to do with herself. I mean, if you think about it, even when she was launching Pat McGrath Labs, her namesake label, she launched that two years before Fenty Beauty. She very easily could have done a 40 shade foundation or a 50 shade foundation and really made that the premise of her brand. But that wasn't the premise of her brand. The premise of her brand was creating great products, quality products, and creating artistry. I mean, one thing that Brennan didn't mention, beyond the fact that she created great runway looks, she also created great iconic products.

5:44I mean, if you look at the Armani Luminous Silk Foundation, Pat created that product. Unfortunately, not like Michael Jordan, she doesn't get proceeds from that product in perpetuity, but she created that product. And that foundation continues to be a bestseller across black women, white women, brown women. And she also created the Dior Show Mascara, which still is a staple in makeup artist kits and for women everywhere. So I think for Pat, like it wasn't really about Pat the person, it was about Pat the look, what she could offer the overall industry. And, you know, she is creating these amazing runway looks, but she was able to distill that and create everyday products that people are still using until this day.

6:25And when she launched a brand of her own, what kind of products did she go with out of the gate? What was the concept there? Well, actually it was really, really interesting. She wasn't launching Armani Luminous Silk Foundation or a dupe for that. And she wasn't launching a mascara. The first product in her collection, and Brennan, I would love to hear you kind of talk about this as well, was this pressed gold pigment shadow. And it could be used on the lips or on the eyes. And it was like came in the sequence bag and it was wild. It crashed her website. It sold out within minutes. I mean, it wasn't a product that like, you know, when you think about repeat purchases, it wasn't something like, oh, I need that every single day.

7:04It was just something special. And it exuded, exuded Pat. I need that every single day, by the way. I do need it every single day. Don't undersell it. Some of us like to be very bold every day. Well, maybe you need to put that gold pigment back on. I mean, if you can get it for 2015, I might have one in the back of a drawer still, but I should have expired. But, you know, I think that she really created this virality or what we talk about virality today and sort of sell drops and, you know, that crushed her website. And she continued to create really pulsy, really vibey drops after that, but they weren't like traditional staple beauty products.

7:41Yeah, just to add to what Priya said, when the brand launched in 2015, it kind of launched as this incubator for Pat's ideas, right? It was this direct pipeline from her creative brain to the cosmetics market. And Gold 001 was the perfect example of that, right? Because it was not an easy product to use by any means. It was not something that was subtle to wear. It came with a kit. It had a mixing medium in it. You had to like liquefy the pigment so that it would go on in this perfect gold foil way. And she launched it at the Tuileries during Paris Fashion Week. And like Bella Hadid was there wearing it.

8:17You know, it was this amazing, amazing launch. And then the first two years, the brand really was Pat McGrath Labs. It was kind of her incubator for her own ideas. And then when the brand really launched, which was with this Sephora exclusive in 2017, that's when it launched with these 61 SKUs. And that's when we were really off to the races with Pat McGrath Labs. And that's also what attracted the attention of Eurizio, which is the private equity firm that invested quite early on in this brand and valued it at a billion dollars. And it seems like that was largely on the strength of this idea that every look she's putting out there is iconic and goes viral.

8:55And if she can translate that into products, that's going to sell a lot of makeup. But I'd love for you to contrast what you just described with her first product with one of her most recent products, which was an attempt to turn that glass skin look you discussed into something people could buy. It sounds like it didn't go quite as smoothly. It did not go quite as smoothly. It did not go as smooth as glass, as one might say. Oh boy. I know. Oh no. Sorry about that. So when the pipeline worked, it worked, right? A great example is there was this really wonderful look that Pat did for a Versace show in 2016, where it was kind of like a red lip that was made of glitter, right?

9:36Like a perfect pat look, simple, impactful, theatrical, and like not, you know, terribly unintuitive to use as a high definition beauty product, right? You get the kit, you put the pigment on, you put the glitter on, and then you're, you know, good to go for the night. By contrast, the glass skin rollout took a little bit longer, and it kind of took the brand by surprise. It's pretty typical for makeup artists to not know exactly what they're going to do for a show until a couple of days before. Things can even change day of. I've heard makeup artists say that things change up until the moment the show starts.

10:09It's a red lip two hours ago, and now it's a cat eye and blush or something. So a couple days before the show, the day of the show, we don't know exactly when, Pat came up with this perfect plasticine mask. And she did it using a trick that would be revealed a couple of days later. But the brand was totally taken by surprise with the reaction to the look. I mean, the show in general generated a lot of conversation, but Pat's makeup look was a big, big, big part of that. And her name surged to the top of Google Trends. It was literally the most her name had been searched other than a time that she literally partnered with Google on a project.

10:48Yes, exactly. It was one of her search traffic peaks right to date. And once the brand realized the impact of the makeup, they tried to capitalize on it by scheduling this masterclass a week later, a week after its viral moment. And that was not fast enough because Aaron Parsons, who is a makeup artist and kind of beauty historian who has her who has a big audience on TikTok and was Pat's assistant in the past, broke the look a couple of days before that, figured out that it was a drugstore peel off mask that was dispensed via an airbrush. So it was finally, finally diffused over the skin. Much, much, much less intuitive than a glitter lip.

11:29This is something that requires machinery to do. So how the brand was going to bring that to market was an open question. At the Margiela show, Pat was wearing her artist hat and not her CEO or CMO hat. Then a little over a year later, she launched the product itself, which was the Glass 001 Peel Off Artistry Mask. A pretty clear dupe of whatever product she used, maybe with a kind of branded or Pat spin on it with some skincare ingredients in it. that would give you that sheen. But yes, not a very intuitive product to use. The launch also stuttered a little bit. They had a really, really big pre-launch to it a week before on Instagram, which I believe Pat does with all of her products.

12:14She really like will tease them up. And, you know, there was a lot of footage from the Margiela show again. And then finally it came out and then it immediately sold out because they had a really, really limited inventory. And now it's back in stock. And I understand that it's sold many thousands of units, but it was more of a limited edition and kind of a marketing play that didn't really play out. So this was a defining moment for her personal brand, but unlike that Versace show, this didn't translate into a defining moment for Pat McGrath Labs. And I think the problem here is just the lag time.

12:48I mean, a year later, people maybe were excited about the look initially, but I think they'd kind of either, you know, if not forgotten about it maybe weren't clamoring to get it anymore. I mean, Galeano didn't even work at Margiela anymore by the time this product came out. Well, I think it's the lag time, but it's also the wearability of the product. I think what made it go so viral was that it was like, you could see it, it was interesting, it was exciting. You sprayed it on your face and maybe you would wear it out to like a party or Halloween or something like that, but it's not something that's everyday or wearable at any capacity.

13:20So to wait a whole year afterwards, we've missed the moment, we've missed the momentum, and it's not something you can actually use, it doesn't really work. And the brand really needed a moment right now, right, Brennan? Yes, the brand really, really needed a moment. It has lost some steam in recent years. We had this amazing valuation a year after the brand launched into Sephora at a billion dollars in 2017. A couple years later, we find out that Eurasio quietly exited the brand, which is somewhat interesting for a brand that was so excited about investing in it. And they had a new investor who purchased a 14.4 % stake in the business at this billion dollar valuation.

14:01So. Or a little more even, right? A little more, yes. So they bought the stake for 168 million euro, so about 183 million dollars. A year later, they marked down their investment by 88%, which would imply a valuation of Pat Grath Labs of closer to 149 million euro, a precipitous drop from its valuation a couple years earlier. And why is that? What changed with the brand's prospects to cause them to do that? Well, you could argue that this private equity stuff, whatever, that the valuation was too high in the first place. But the brand has certainly been troubled since its launch. Since its launch into Sephora, it's come out with a couple of hits, like it has these matte trans lipsticks.

14:43It has the Mothership palettes. But the brand has also done things at great cost. When it made those mothership pallets, it had to airlift them from China to Italy to meet their deadlines to get filled, which is insanely expensive logistically. And there were other things behind the scenes that indicated that it was a workplace in turmoil. There were a lot of complaints from employees publicly on public forums like Glassdoor about the leadership behind the scenes, the fact that operations were a mess, that nobody knew what anybody else was working on because of this culture of secrecy and the siloing of employees.

15:21So it certainly seemed like a story and like something was going on. We'll be back with more of The Debrief right after this.

15:37I want to talk a little bit about Pat as an operator. There are all these tropes in fashion and beauty about the mad genius or the mercurial creative that's egotistical. All these, and I don't know if any of that applies to Pat, by the way. But what kind of operator was she? Was she more of an artist and less of an operator to begin with? What role did she play in this culture? Yes. Well, what we know beyond a shadow of a doubt is that Pat McGrath Labs was Pat McGrath. She is the CEO. She is the founder. She's the creative director. The buck stops with her. And that came up many, many times, both in my reporting and my interviews with people.

16:14The fact that she signs off on everything, that she touches everything, that this brand is really a manifestation of her vision. I think that vision is the vision of a creative makeup genius. Nobody can dispute the quality of the products that she has made. Nobody can dispute her bona fides in the fashion and beauty industry. However, I have yet to see evidence that she is a successful operator in a business. So execution is where things fell off. She did do some hiring. In Brian's introduction, you talked about someone that exited recently that may or may not have been the CEO. Can you talk us through some of the lack of clarity around titles, but also that there were some leadership people that she put in place.

16:55Yes, absolutely. There were some leadership people that she put in place. My understanding of the structure of Pat McGrath Labs was that Pat was at the top. She was surrounded by a kind of close group of insiders. And then she, of course, had her senior leadership team beneath that. And then all of the employees who worked in her New York office and then makeup artists who worked and supported stores around the country and around the world. But the brand has also seen a lot of employee turnover in recent years. In 2024, Before they brought on a kind of new executive team to hopefully turn around the business, one of them was a CEO who came from Kiko Milano, where he was chief transformation officer.

17:32And his name was Robbie Hamdan. And he identified himself on LinkedIn as the CEO of the company. But then he left about a year later. He sent an email to the staff and some merchants, as well as Pat herself, that explained that the environment of the company that he walked into was not what he understood it would be. And that CEO title proves surprisingly controversial. The brand actually says that was not his title, right? Yes. I have been assured by somebody close to the brand that Pat is and has always been the CEO of Pat McGrath Labs. And whether or not that's true, I would say it's not a good sign if there's a dispute over who is actually running a company at any given time.

18:15And that to me kind of crystallized the whole problem here, which is for all this talk of billion dollar valuations and global distribution deals, it sometimes doesn't feel like this is being run like a real company. I mean, I don't think it's necessarily that it's not being run by a real company, but it's just that when one person, I think you can point to this in any organization, when one person is the yes and no on every single detail or thing, I mean, it doesn't allow people to have fluidity. It's not allowed people to make decisions. I mean, I think one of the greatest lines in Brenna's story, although there are many, is when Alison Hahn from Sephora is talking about how everything is done last minute.

18:54Everything is Pat's vision. It's like she's staying up till midnight making a creation and then Sephora gets it when they get it. I mean, I don't think that a real business today, especially in one as competitive as beauty with so many makeup artists and with so many founders can operate that way and succeed. I thought you were going to refer to another line, which was about a lot of these meetings being an echo chamber for Pat's vision, allegedly. What about products specifically? I saw there were a lot of comments around the price point that maybe she aimed a little too high in the prestige category.

19:26Like Priya, is that a common theme for these founders that are makeup artists and have, you know, they're lauded after, they're revered and they come up with these products and they expect people to be willing to pay hundreds of dollars and then they're just not? Well, I think Pat sits in a class of her own in the sense like these, I think the Mother Chappelle is in like$120 or$130 depending on the size that you get. But you have to think about the fact that because she has these runway bona fides, all of these makeup artists who kind of came up were always sitting in prestige, like Bobby Brown, Laura Geller.

19:59Like these are the ones that came before Pat, Laura Mercier. They were all on the runway. They all came to market via Estee Lauder or through other conglomerates, and they were priced at a certain price point. Now there's the new guard, Mario, Gucci Westman. None of those people are saying, I'm a drugstore brand. Nobody is saying, I'm Mastige. They're saying, I have the expertise of the runway. I have the expertise of working on people's faces. And so this is a premium product. This is a product from an expert. And so I think from all of these people and Pat ushered in a new guard of makeup artists to say, I want to have my own brand.

20:33She probably went the highest though, in terms of, of price point and execution. And I think that's also because if you look at the products themselves, they are so, so detailed. Like it's not just the glitter and the pigment or the plastine saran wrap skin product that needs to be applied with an airbrush. It's also the packaging. I mean, the matte trans lipsticks, which are phenomenal and great, and I have a few myself, has a huge gold lip on it. That's not packaging that's cheap. That's not something that she's scrimping on. And I think Pat has a vision, both in product and packaging and marketing.

21:09Brennan, you can speak to this with the Naomi Campbell thing. She is not willing to cut corners and she wants the best of the best. And that's what you're getting. And that's what the price is for. So it's worth it, but maybe not. People are not able to pay for it. It's worth it for her, but is it worth it for the customer? I want to hear about the Naomi Campbell thing now. Yeah, a great example of Pat's exacting standards was their launch into skincare in 2022. They've come out with one skincare product since then, and it is the Divine Skin Rose Essence. It is gorgeous to behold, okay? The bottle has this pink liquid in it, it has this pink cap, it has the gold of Pat McGrath Labs.

21:43It's beautiful. I heard that Pat had really, really wanted this formula that Estee Lauder had a patent on, and she had her eyes on it for a long time. And this is also another thing about Pat that Priya spoke to earlier with Dior Show Mascara and Armani Luminous Silk. Like she has her eyes on the industry. She knows everything that's going on. She knows quality and she knows a good product. So she really, really wanted this patent. And as soon as she got it, they developed this product and they wanted to celebrate it with this, what I would call a triple A talent photo shoot, right? We had Mizell on the lens.

22:16We had Naomi Campbell in front of it. it was a Pat production because these are Pat's contemporaries, right? And this is what she does. And they shot an ad. And I understand that Naomi did some press for it. And I believe it cost more than a million dollars to do this. It was a real Vogue tier production. And whether it sold the essence or not is kind of an open question. Well, that's the question, I guess, is her talent and her stature is, if anything, higher than it was when she founded this brand and at the brand's peak, you know, with the Louis Vuitton announcement. But it doesn't feel like that's enough in the current market.

22:54And does that have something to do with what consumers actually want when they go into Sephora and are looking for makeup? Yeah, well, another good point, too, is if they go into Sephora looking for it, they probably won't find it. Because even though Pat has had this relationship with Sephora. And she recently also launched into Ulta. The distribution for the brand has always been pretty low. Now I understand that you can find it in some off-price stores. And the brand has said there's about 700 doors worldwide that carry the brand, although they wouldn't break it down and explain which of those are specialty retail versus not.

23:25But it's just not a brand that has ever been super accessible, maybe by design. What about her Louis Vuitton appointment, though? She's going to be ever more omnipresent in the next year with this very coveted role she's taken on. What does that mean for Pat McGrath Labs now? Well, I would argue that maybe she's not going to be omnipresent. I mean, Pat doesn't give a lot of interviews, as we know from Brennan's story. Pratt does a lot of interviews on video off when she does events. And Brennan can speak to this. When you want to take a selfie with her, you want to take a picture with her, her team takes the picture and airdrops it to you.

24:00You're not taking like backstage beauty pictures as if you're doing it yourself. So I think, Pat, there is this aura of secrecy around her, an aura of like the mercurial genius by herself. So I don't know if she's going to be readily available to be doing interviews and shilling this product the way that other founders do on IG Reels or stories. I mean, I think she's going to be the face and I think there's going to be some very interesting, dedicated campaigns and interviews, but I don't ever imagine her being the same way with some of these Gen Z or millennial founders on social. Brennan, wouldn't you agree?

24:35Yeah, I would agree. This is my opinion. Pat for Louis Vuitton is like, I think what Pat should be doing like all the time. I think that putting her in that position to develop cosmetics for a brand of that size that has that fashion capability and has that scale is perfect for her. The Louis Vuitton shopper, the person who is going into the store is going to add like 10 lipsticks onto whatever they're buying. They're going to take the two palettes in a way that maybe the Pat McGrath Labs customer wouldn't. And it's hard for me to see Pat McGrath Labs' future at this scale and at this rate. Perhaps if the brand downsized at all, perhaps if it went back to its roots as that kind of incubator for Pat's, you know, more like out there ideas that Louis Vuitton maybe isn't going to do like a gold 001 because they're like, why would we make this kit that has like three products and a mixing material in it?

25:25But, you know, Labs can produce it. And then thousands of her fans who will buy whatever she's selling will gobble it up. I think that that sounds great for her. And I can't wait to see what she does with Louis Vuitton and how that brand will use her artistry to kind of build their beauty credibility. I would agree with your original point that I think she's found a good place. Like that is the incubator probably for her vision. That is the platform. She's not the face of Louis Vuitton. She's the makeup artist behind a vision. that seems like that better matches all the things that she's really good at, just being innovative and creative and not being the face of something.

26:00Although what I would say is to get back to, I'm sorry, I forget if it was Priya or Brennan, who said it earlier, but the problem with designing all these hit products for Armani or Dior or now Louis Vuitton is I'm sure she gets a lovely paycheck from them, but Rihanna is a billionaire because Rihanna has a successful line of her own. And I'm not in Pat McGrath's head. I do not know her thinking about the rest of her life, but you have to wonder if she tries to, you know, make one more go of Pat McGrath Labs, because ultimately that running your own company is the key to unlocking, you know, all that wealth and power and influence and independence, most importantly, that no matter how successful you are in that Louis Vuitton kind of role, you never quite get.

26:45Well, that's what I was going to say is that I think this is what she should be doing as well. And I think that like, she's going to be fantastic at it. And And they will be able to compete with the Hermes beauties of the world or the Armani's or the Chanel's and the Dior beauties, which have really nailed the fashion designer beauty proposition. But it's not as lucrative. I mean, being a creative director or being, you know, a product developer and not getting a cut like she should have for Armani Luminous or Dior show mascara, you know, is not as lucrative as having your own brand. And, you know, we forget to say a few years ago it was valued at a billion dollars.

27:19So I think that dollar sign and those zeros certainly was in her mind and certainly was an investor's mind. I just don't know personally, and Brennan said this as well, you know, where does the brand go from here? Is it need new investors? Probably. But it also needs leadership and operational know-how for it to actually scale. Otherwise, it's going to be a pet project in comparison to what she does with Louis Vuitton. Yeah. And I think that that's also really worth emphasizing is that we can talk about products all day. And we often do. But I think one of the biggest issues that's facing Pat McGrath Labs uniquely as a brand are some operational issues on the inside, especially when it comes to leadership.

27:59In some of the chatter that I've seen about the story, I've seen some people sort of call that out, but not many. People would rather talk about the products. And I think what Pat should be doing, and this kind of contrasted with the Louis Vuitton announcement. But I think that looking at that leadership structure and fixing the company culture is is going to be integral, if not, I don't know, a word more impactful than integral to the brand's continued longevity. I think that's a good place to wrap it up. It's hopeful, but maybe not, not completely a dream come true moment. But I think that's, it's up to her now and how she moves forward, how she thinks about her team, if it becomes a pet project or back to that billion unicorn that it was several years ago.

28:45Brennan, Priya, thank you so much for joining us. Thank you. Thank you. This was great. Please be sure to check out Brennan's article, What Happened to Pat McGrath Labs at businessoffashion.com. These and other stories are available to BOF Professional subscribers only, and you can find the links in the episode notes. You've been listening to The Debrief, produced and edited by Olivia Davies and Eric Bria. I'm Sheena Butler-Young. And I'm Brian Baskin. We'll be back next week with a new episode. Thanks so much for joining us and be sure to follow us wherever you get your podcasts.