It is a new day for Pat McGrath Labs.
On Friday (Apr. 17), a Florida judge approved the cosmetics giant’s exit from Chapter 11 bankruptcy, three months after the company announced a reorganization strategy. GDA Luma, the Miami-based company that invested $30 million in Pat McGrath Labs, will assume ownership, while the brand’s founder will remain with the company as Chief Creative Officer.
The news was first reported by Business of Fashion.
“Creating beauty that moves people has been my life’s work, and that never stops,” McGrath said in a statement. “I will continue pushing boundaries in my role as Chief Creative Officer alongside GDA Luma, and I look forward to the future.”
According to a press release, the company under GDA Luma will move into “a new phase of creative excellence, operational discipline, innovation-led growth, and sustainable long-term success.”
The January bankruptcy filing added to speculation that the company would be sold. After launching in 2015, the company saw its products sold in major retailers like Sephora and Ulta Beauty. But sluggish sales, executive shakeups, operational errors and layoffs have slowly contributed to its decline from a commercial standpoint. Eurazeo Brands, a fashion firm that committed $60 million in funding in 2018, quietly pulled its stakes from the company months before issues became public.
However, GDA Luma helped give Pat McGrath Labs a bit of a lifeline, first with $10 million in debtor-in-possession financing to support operations and restructuring, and another $20 million in post-emergence capital to maintain liquidity.
Once considered for auction, Pat McGrath Labs is back, looking to expand and accelerate toward future innovation.
“Pat McGrath Labs is an iconic brand with extraordinary creative equity and global potential,” Gabriel de Alba, founder and managing partner of GDA Luma, said. “Our priority has been to stabilize the foundation of the business, implement best-in-class operating disciplines, and invest in the next phase of sustainable growth while preserving the brand’s legacy of creative excellence.”
