Beauty Brand Pat McGrath Labs Files for Bankruptcy
Pat McGrath Labs, the luxury beauty brand founded by iconic makeup artist Pat McGrath, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Florida. The filing was made on January 22, 2026, just days before a planned auction of the company’s assets was scheduled to take place.
The Chapter 11 move allows the company to continue its operations while restructuring debt and navigating a path back to financial stability, rather than immediately liquidating assets.
As part of the filing, the previously planned public auction, which was set to sell the brand’s assets and intellectual property, was cancelled or postponed indefinitely.
What Chapter 11 Means for the Brand
Under Chapter 11 bankruptcy protection, a company remains open and operational while it reorganizes its finances. For Pat McGrath Labs, this means the business can continue selling products, honour existing retail partnerships, and work with creditors under court supervision as it seeks a more sustainable financial footing.
Company representatives have stressed that day-to-day operations will carry on, including sales through retail partners like Sephora, Ulta Beauty, Macy’s, and other stockists.
The restructuring effort aims to stabilise the business and preserve the brand’s presence in the highly competitive prestige beauty market.
Read: How AI Is Helping Ardent Physicians Reclaim Time
Background: Rise and Financial Struggles
Pat McGrath Labs first launched in 2015, quickly becoming one of the most celebrated names in luxury cosmetics due to its bold formulas, richly pigmented shadows, and trend-setting releases. In 2018, the brand achieved a valuation above $1 billion after a significant investment from private equity.
However, in recent years, the company’s valuation declined amid challenging market conditions, slowing sales, and shifts in consumer demand. Earlier in 2025, Hilco Global was appointed to manage a distressed sale process, moving toward a planned January auction that was ultimately halted by the Chapter 11 filing.
What’s Next for the Brand
The bankruptcy process gives Pat McGrath Labs breathing room to renegotiate debts, maintain its workforce, and pursue a potential turnaround without immediate liquidation.
Though this marks a difficult period for the once-soaring beauty brand, the Chapter 11 filing reflects a strategic shift toward long-term viability rather than abrupt closure.
Stakeholders, including customers and industry watchers, will be watching closely to see how the restructuring impacts product availability, retail partnerships, and the brand’s creative direction in the months ahead.