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Pat McGrath Labs has filed for Chapter 11 bankruptcy protection in the Southern District of Florida, according to a petition filed on Jan. 22.
On Sunday night, Women’s Wear Daily reported the filing and added that Pat McGrath Labs’ asset sale scheduled for Tuesday would be postponed indefinitely, as a spokesperson told the publication the company will continue trading while it restructures its balance sheet. A Chapter 11 bankruptcy allows the company and its owners to continue trading and standard business operations while a restructuring plan is negotiated with creditors.
The company has claimed between $50 million and $100 million in estimated liabilities, according to filings. On Sunday, it filed emergency motions for the payment of critical vendors for $426,402 and for the payment of employee wages, salaries and other compensation for $689,324.
The company was founded by the famed makeup artist Pat McGrath in 2015. It had been intending to hold a sale of its assets on Jan. 27 following a precipitous drop in sales and valuation: The company was valued at more than $1 billion in 2018 when PE firm Eurazeo made a $60 million investment. (Eurazeo quietly exited its investment in 2021.) After fellow investor Sienna Investment Managers marked down its investment in Pat McGrath Labs by 88 percent in 2024, implying a valuation of closer to $174 million, the firm also signaled its intent to exit in 2025.
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The Jan. 27 auction was intended to be part of a restructuring, with representatives for the company telling The Business of Beauty in December that it would “allow Pat McGrath Labs to move forward in a productive and healthy environment.”
Brennan Kilbane contributed reporting.
Learn more:
What Happened to Pat McGrath Labs?
The brand founded by the legendary makeup artist nearly a decade ago is struggling. Once valued at over $1 billion, the line is worth a fraction of that today. Multiple rounds of layoffs, and signs of behind-the-scenes turmoil raise questions about what went wrong and how the business can get back on track.
