Pat McGrath Labs files for Chapter 11 bankruptcy, cancels planned asset sale

Cosmetics brand reports up to $100 million liabilities while continuing operations and restructuring balance

Pat McGrath Labs has filed for Chapter 11 bankruptcy protection in the Southern District of Florida, according to court documents filed on January 22 and reported by Women’s Wear Daily and The Business of Beauty. The filing places the cosmetics brand under court-supervised restructuring while allowing it to continue normal operations.

As part of the process, the company has cancelled an asset sale that had been scheduled for January 27. A spokesperson told Women’s Wear Daily that the sale has been postponed indefinitely and that the business will continue trading as it works to restructure its balance sheet under Chapter 11 protections.

Bankruptcy filings show that Pat McGrath Labs listed estimated liabilities ranging between $50 million and $100 million. The company also submitted emergency motions seeking approval to pay critical vendors approximately $426,000, as well as nearly $690,000 in employee wages, salaries and related compensation, according to the filings.

Founded in 2015 by renowned makeup artist Pat McGrath, the brand rose rapidly and reached a valuation exceeding $1 billion in 2018 after receiving a $60 million investment from private equity firm Eurazeo. Eurazeo exited its stake in 2021. Subsequent investors later sharply reduced the company’s valuation as sales declined, with Sienna Investment Managers marking down its investment by 88 percent in 2024, implying a valuation of about $174 million. Sienna also indicated plans to exit the investment in 2025.

The planned January auction had been positioned as part of a broader restructuring strategy. Representatives for the company told The Business of Beauty in December that the sale was intended to help Pat McGrath Labs stabilize and move forward in a healthier operating environment.

The Chapter 11 filing marks the latest chapter in the brand’s efforts to address financial challenges following years of declining valuation, layoffs and internal restructuring, as previously reported by The Business of Beauty.