When Billionaire Brands Break Up: What Fenty Beauty’s £1.5B Exit Really Tells Us About the Celebrity Business Model

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Hey there,

So LVMH just did something that should make every creator with a business pay attention.

They’re exploring a sale of their 50% stake in Fenty Beauty Rihanna’s makeup empire at a valuation between £750 million and £1.5 billion.

On the surface, this looks like another celebrity brand success story. Rihanna becomes a billionaire. Everyone wins.

But dig deeper into the numbers, and you’ll find a story that’s way more interesting and way more instructive than “famous person builds beauty brand.”

Because here’s what nobody’s talking about: Fenty’s revenue peaked several years ago, and sales in North America are down double digits.

So why is LVMH selling a declining brand for over a billion pounds? And what does this tell us about the future of celebrity businesses?

Let me show you what’s actually happening here because it changes everything we thought we knew about building brands in 2025.

The Numbers That Tell Two Different Stories

First, let’s look at what everyone sees:

The Success Narrative:

• Fenty Beauty generated around $450 million (£336M) in net sales in 2024

• Launched in 2017, the brand hit $570 million (£426M) in revenue by 2018

• Rihanna’s 50% stake is worth about $1.4 billion (£1.05B), making her a billionaire

• Named to Time magazine’s 25 best inventions of 2017

• Launched with 40 foundation shades, revolutionising inclusivity in beauty

Now here’s what the headlines aren’t showing you:

• Revenue peaked at £426M in 2018, now down to £336M in 2024

• Sales in North America are “down double digits”

• In 2020, Fenty generated up to $550 million (£411M) in revenue with a valuation of $2.8 billion (£2.1B)

• Current valuation of £750M-£1.5B represents potential decline from 2020 peak

The insight everyone’s missing: Fenty Beauty peaked in year three and has been declining ever since. Yet LVMH can still sell it for over a billion pounds.

That’s not a failure story. It’s a masterclass in value creation.

What’s Really Happening: The Strategic Exit

LVMH is selling because they are likely attempting to raise cash ahead of a potential bid for Armani, which could be valued at as much as €10 billion (£8.6B)

This is portfolio management.

But here’s what makes it fascinating: Both LVMH’s potential sale of Fenty and Kering’s beauty divestiture reflect a desire to focus resources on core areas and brands with stronger revenue potential

The Four Phases of Fenty: A Case Study

Let me break down what actually happened with Fenty, because it’s a perfect blueprint for understanding celebrity brand life cycles:

Phase 1: The Lightning Launch (2017-2018)

• In the brand’s first month, Fenty Beauty recorded $72 million (£54M) in earned media value

• Generated $570 million (£426M) in revenue within 15 months

• Pro Filt’r foundation sold over 1 million units within the first 40 days

Phase 2: The Peak (2019-2020)

• Revenue hit £411M-£426M range

• Valuation reached $2.8 billion (£2.1B) in 2020

• Brand became cultural phenomenon, forcing entire industry to expand shade ranges

Phase 3: The Plateau (2021-2023)

• Revenue peaked several years ago

• Market saturation in core categories

• Competition intensifies as others copy the inclusivity model

Phase 4: The Strategic Exit (2024-2025)

• Revenue down to £336M (still substantial)

• Recent expansion: debuted in India, launched body collection at Ulta Beauty, signed WNBA sponsorship

• LVMH exploring exit at £750M-£1.5B valuation

The lesson: Even declining from peak, a well-built celebrity brand retains massive value.

Why Fenty Is Still Worth Over £1 Billion Whilst Declining

This is the bit that’s absolutely fascinating.

Revenue is down. Sales are declining. Yet the valuation holds at over a billion pounds.

Here’s why:

1. The Cultural Moat Fenty changed the industry. Many brands followed Fenty’s example and added more inclusive shades to their own collections after its release.

That cultural impact has lasting value even as sales soften.

2. The Infrastructure Eight years of LVMH backing means world-class:

• Supply chain relationships

• Distribution networks (Sephora, Ulta, Amazon, international markets)

• Manufacturing partnerships

• Retail presence

3. The Customer Base The brand recently debuted in India, one of the fastest-growing beauty markets globally. International expansion potential remains significant.

4. The Brand Equity Rihanna’s involvement even if less hands-on due to music and motherhood still carries weight. The Fenty name means something.

5. The Turnaround Potential For a strategic buyer (likely another beauty conglomerate or private equity), there’s clear upside:

• Cut costs by integrating into existing operations

• Refresh product line with new launches

• Leverage existing brand equity without starting from scratch

The Rhode Comparison: Two Different Playbooks

Now let’s talk about why everyone’s comparing this to Rhode’s recent £800M acquisition by e.l.f. Beauty.

On the surface, they look similar:

• Celebrity founder with massive influence

• Inclusive beauty brand

• Strategic acquisition by larger player

• Billion-pound valuations

But the fundamentals are completely different:

Rhode (at acquisition):

• Revenue: Growing rapidly

• Margins: 34% EBITDA

• Marketing efficiency: 9x MER (£9 revenue per £1 spent)

• COGS: 19%

• Trajectory: Ascending

• Founder involvement: Active daily

Fenty (at potential sale):

• Revenue: £336M but declining

• Margins: Not disclosed (likely compressed)

• Marketing efficiency: Unknown (probably lower given Rihanna’s reduced involvement)

• Trajectory: Descending from peak

• Founder involvement: Limited due to other commitments

Rhode was acquired for its growth. Fenty is being sold for its scale. Both are valid strategies. But they’re completely different business models.

What This Tells Us About Celebrity Brand Life Cycles

Here’s the framework that explains both Fenty and Rhode:

The Celebrity Brand Life Cycle:

Stage 1: Launch Velocity (Months 1-12)

• Massive earned media value

• Celebrity’s influence drives initial sales

• Product scarcity creates urgency

• Margins compressed by heavy investment

Stage 2: Category Definition (Years 1-3)

• Brand defines its market position

• Revenue peaks as awareness maxes out

• Cultural impact crystallises

• Competitors begin copying the model

Stage 3: Operational Reality (Years 3-7)

• Growth slows as market saturates

• Celebrity involvement often decreases

• Brand must compete on product merit, not just fame

• Margins either improve (good operations) or compress (inefficiency)

Stage 4: Strategic Decision (Years 5-10)

• Exit to strategic buyer (Fenty’s path)

• Reinvention with new product categories

• Steady-state cash generation

• Wind down

The critical insight: Most celebrity brands have a 3-7 year window of peak performance. The question isn’t whether it will slow it’s what you build during the peak that determines exit value.

The Three Types of Celebrity Brand Exits

Based on recent activity (Rhode, Fenty, and rumours about Rare Beauty), I’m seeing three distinct exit patterns:

Type 1: The Growth Exit (Rhode)

• Acquired whilst ascending

• Premium valuation based on future potential

• Founder stays involved

• Acquirer expects to scale further

• Example: £800M+ for Rhode with £150M-200M revenue

Type 2: The Scale Exit (Fenty)

• Sold after plateau

• Valuation based on existing infrastructure + turnaround potential

• Founder involvement optional

• Acquirer sees operational efficiencies

• Example: £750M-£1.5B for Fenty with £336M declining revenue

Type 3: The Distress Exit (Not Yet Seen)

• Sold during decline

• Valuation primarily brand name

• Founder exits completely

• Acquirer is liquidator or private equity turnaround specialist

• Example: N/A yet, but coming

Your positioning determines your exit multiple.

Rhode got 4-5x revenue whilst growing. Fenty might get 2-4x revenue whilst declining. Both are successful exits—just different types.

Why LVMH Is Actually Making a Smart Move

Everyone’s framing this as LVMH giving up on celebrity beauty. That’s not what’s happening.

LVMH’s potential divestiture appears less about Fenty’s performance and more a signal of changing priorities.

Here’s the strategic thinking:

What LVMH Learned from Fenty:

1. Celebrity beauty can generate massive returns (£426M revenue at peak)

2. But it requires constant celebrity involvement to maintain momentum

3. And celebrities have other priorities (music, family, other businesses)

4. The operational complexity doesn’t match LVMH’s traditional luxury model

What LVMH Is Prioritising Instead:

• Heritage luxury brands (potential Armani acquisition)

• Multi-generational maisons that compound value over decades

• Brands that don’t rely on a single person’s ongoing involvement

The trade: Exit celebrity beauty at a premium whilst buyers still value it highly, redeploy capital into century-old luxury houses.

What Rhode Did Differently (And Why It Matters)

Hailey Bieber saw what happened to Kylie Cosmetics (sold to Coty, value written down significantly) and Fenty (peaking then declining).

So she built Rhode with one critical difference: she sold whilst ascending.

E.l.f. Beauty bought Hailey Bieber’s company Rhode for $1 billion (£750M) earlier this year.

The timing was perfect:

• Revenue growing rapidly

• Margins best-in-class (34% EBITDA)

• Hailey still deeply involved

• Product innovation pipeline strong

• Cultural relevance at peak

The strategy: Sell at peak valuation to a buyer who can scale without needing Hailey’s daily involvement, but whilst her involvement still adds value.

The outcome: Hailey likely maintains some equity upside, gets liquidity, keeps creative control, but offloads operational burden.

That’s the playbook going forward.

The Selena Gomez Situation: Another Test Case

Speaking of timing, Rare Beauty is estimated to hit $400 million (£299M) in revenue for 2025, fuelled by viral products like the Soft Pinch Liquid Blush.

Rumours suggest Rare Beauty is also exploring minority stake sales or full acquisition.

If Rare Beauty sells now, it follows the Rhode playbook: Exit whilst ascending, at peak valuation, with strong fundamentals.

If they wait 3-5 years, they risk the Fenty outcome: Still valuable, but declining from peak, lower multiples.

The window is narrow. The decision is critical.

The Five Lessons for Any Creator Building a Business

You don’t need 50 million Instagram followers to apply these insights. Here’s what Fenty and Rhode teach us:

1. Peak Performance Has a Timeline Your business will have a 3-7 year window of maximum momentum. Build for exit during that window, not after.

2. Attention Is Your Scarcest Resource The more successful you become, the less time you can devote to any single business. Plan for this from day one.

3. Infrastructure Outlasts Hype Fenty is worth over £1B whilst declining because LVMH built real infrastructure. Distribution, relationships, systems—these have value even when growth slows.

4. Exit Timing Determines Valuation Rhode got 4-5x revenue growing. Fenty might get 2-4x declining. Same industry, different timing, vastly different outcomes.

5. Cultural Impact Creates Lasting Value Even with declining sales, Fenty retains value because it changed the industry. Build something that matters, not just something that sells.

The Strategic Question Every Creator Must Answer

Here’s the crossroads every successful creator faces:

Do you want to own 100% of something small forever, or 50% of something massive temporarily, or 10% of something generational?

Rihanna chose: 50% of something massive temporarily (£1.05B net worth from Fenty stake)

Hailey chose: Sell majority whilst ascending, keep some equity for upside

Selena might choose: Similar to Hailey

Each is valid. But you must choose consciously.

Because here’s the truth: If you build something genuinely valuable, staying private and independent means leaving money on the table. But selling means giving up control.

There’s no perfect answer. Only trade-offs.

What Happens Next

Based on the Fenty situation and broader market dynamics, here’s what I expect:

Short Term (Next 12 Months):

• LVMH completes Fenty sale to strategic buyer (likely L’Oréal, Estée Lauder, or P&G)

• Rare Beauty likely announces minority sale or acquisition

• More celebrity brands rush to market before window closes

Medium Term (2-5 Years):

• Consolidation wave in celebrity beauty

• Only brands with genuine operational excellence survive independently

• Private equity becomes dominant acquirer (not strategic buyers)

• Valuations compress as market matures

Long Term (5-10 Years):

• Celebrity beauty becomes licensing business model (like fragrances)

• Direct ownership replaced by royalty structures

• Only exception: Founders who can prove sustained operational involvement

The trend is clear: Build for exit, not forever ownership.

Your Takeaway

The lessons:

• Build something that changes your category (Fenty did this with inclusivity)

• Use your peak momentum window wisely (Years 1-3 are critical)

• Create real infrastructure, not just hype (Distribution, systems, relationships)

• Understand your attention limitations (Celebrity time is finite)

• Exit strategically, not desperately (Timing determines valuation)

Whether you’re a creator with 5,000 followers or 50 million, these principles apply.

The question isn’t whether your business will plateau. It’s what you build during the ascent that determines how much it’s worth at the peak.

Build for the exit you want, not the one you’ll need

David

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P.S. Fenty Beauty is declining from peak and still worth over £1 billion. That’s not a failure, that’s understanding that business value comes from strategic timing, not just endless growth. What could you exit today that might be worth less in three years?

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