Dive Brief:

• Seeking control over the brand she licensed out, celebrity artist Ariana Grande has entered into a purchase agreement with Forma Brands for the assets of her makeup company R.e.m. Beauty, according to court documents. The proposed deal — which was first reported by Bloomberg — is subject to the bankruptcy court's approval, as Forma Brands filed for Chapter 11 in January.
• The purchase price of the assets — including all inventories, unfilled purchase orders, returns and more — is listed at $15 million.
• Forma Brands entered into an initial licensing agreement with the celebrity’s brand in December 2020, with the ability to develop, manufacture, market, sell and distribute the branded products. In November of last year, however, the brands started arbitration in part related to claims from October that the license agreement was validly terminated by Grande’s company.

Dive Insight:

Ariana Grande’s makeup company is looking to buy back assets from Forma Brands just as the brand is about to expand into Sephora stores across Europe on Feb. 13. Along with its direct-to-consumer channel, R.e.m. Beauty is currently sold at Ulta Beauty and Selfridges.

Forma filed for bankruptcy last month about a week after it announced the closure of all its Morphe U.S. brick-and-mortar stores. It entered into a proposed acquisition deal in which lenders, including Jefferies Finance, will pay $33 million to take over the business. Forma has about $868 million in funded principal debt and interest obligations.

The company said in court documents at the time that the COVID-19 pandemic caused liquidity and operational issues, but added that the need to terminate certain deals with influencers and changes to consumer shopping behaviors also impacted the brand.

While the pandemic may have had an impact on consumer shopping and macroeconomic factors continue to create pressure, prestige beauty sales in the U.S. appear to remain strong. Sales revenue from prestige beauty grew 15% year over year in 2022, reaching $27.1 billion, according to data from the NPD Group. All sectors in the category, including skincare and makeup, grew double digits.

However, some beauty brands have struggled to keep up with increased costs and changing demand. In December, prestige skincare company Dr. Dennis Gross announced it would be raising prices on some products due to ingredient pricing and supply chain issues. Additionally, Kristen Bell’s CBD skincare line Happy Dance announced it would be shuttering its e-commerce site in January and selling some products through select retailers while supplies last.