Pat McGrath Labs Files For Chapter 11 Bankruptcy

For the past decade, Pat McGrath Labs has stood as one of the most influential beauty brands of the modern era. Built on artistry honed backstage at fashion week and scaled into a global luxury business, the brand redefined what it meant for a makeup artist to become a founder, a force, and a cultural architect.

Now, the company is entering a new chapter.

[SEE ALSO: Ami Colé Is Closing—And That Says Everything About The Beauty Industry]

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Pat McGrath Labs has filed for Chapter 11 bankruptcy, WWD reports after months of speculation since the was scheduled for auction to take place this week.

“During this process, the company will continue operations in the ordinary course of business while working to restructure its balance sheet and to forge a path to thrive,” the brand said in a statement. “Pat McGrath Labs remains committed to its community, customers, partners and stakeholders as it continues delivering its signature, high-quality products and culture-defining artistry and innovation.”

According to court documents, the Chapter 11 filing pauses an auction initiated by the company’s secured lender. In an affidavit, McGrath stated that the bankruptcy was filed to prevent what she described as a “commercially unreasonable” sale of the company’s assets.

Long known as the mother of makeup, Pat McGrath launched her namesake beauty brand in 2015 with Gold 001, a $40 multipurpose pigment packaged in custom sequins that sold out 1,000 units in six minutes. The product marked the beginning of a drop-driven model that blended runway-level artistry with direct-to-consumer hype, long before that strategy became industry standard.

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In 2018, the brand made headlines with a $1 billion valuation after receiving a $60 million investment from Eurazeo Brands. The brand closed out the year with more than $60 million in retail sales and cemented its status as one of the most celebrated Black-owned beauty brands in the world. 

Despite its cultural influence, court filings reveal that the brand faced growing financial headwinds in early 2025, including liquidity constraints. Pat McGrath Labs took out a $17.5 million short-term loan from GDA PMG Funding LLC as a temporary bridge while working toward a longer-term solution. By June 2025, the company had not been able to refinance or repay the loan on the original timeline.

GDA later asserted that the outstanding balance had grown to more than $43 million and began the auction process that the Chapter 11 filing ultimately halted.

Industry sources cited by WWD estimate that the brand generated approximately $50 million in revenue last year. In recent years, the company has also experienced executive turnover and layoffs, while Eurazeo exited its stake as the brand’s valuation declined to a fraction of its former peak.

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The bankruptcy filing arrives as McGrath’s personal influence in fashion and beauty remains firmly intact. Most recently, she was named beauty director of Louis Vuitton’s first-ever makeup line, La Beauté Louis Vuitton.

“Being able to build beauty, but not just only beauty — a real world, a planet, basically — it’s been so much a universe, so much fun,” McGrath said earlier this year while discussing the project.

While the future of Pat McGrath Labs remains uncertain, the Chapter 11 filing signals an attempt at preservation rather than disappearance. The company has confirmed that operations will continue during the restructuring process, and the auction has been postponed indefinitely.

For an industry shaped in no small part by McGrath’s vision, the moment serves as a reminder that even legacy-defining brands are not immune to the shifting economics of modern beauty. What remains unchanged is Pat McGrath’s imprint on the culture — an influence that extends far beyond balance sheets and into the very language of beauty itself.

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