Pat McGrath Labs Exits From Chapter 11 Bankruptcy Under New Ownership
PatMcgrath Labs has exited Chapter 11 bankruptcy with a new owner, according to Business of Fashion. GDA Luma will hold a controlling equity interest by creating a new holding company. McGrath will remain in her role as chief creative officer, but her equity will be transferred to GDA Luma.
“Pat McGrath Labs is an iconic brand with extraordinary creative equity and global potential,” said Gabriel de Alba, Founder and Managing Partner of GDA Luma, in a press release.
“Our priority has been to stabilize the foundation of the business, implement best-in-class operating disciplines, and invest behind the next phase of sustainable growth while preserving the brand’s legacy of creative excellence.”
Pat Mcgrath Labs leaving Chapter 11 bankruptcy
BOF reported that the holding company will authorize all intellectual property owned by Pat McGrath Labs from McGrath. It will also receive a $20 million exit loan from new parent GDA Luma, which was pre-approved by the court in February.
GDA Luma will have full ownership of the new holding company, per filings, with $500,000 in preferred equity allocated to secured creditor Keyhaven Capital Partners, which said it invested over $11 million in the brand in late 2024. All other existing equity would be canceled.
Pat McGrath Labs filing for bankruptcy
The makeup brand filed for Chapter 11 bankruptcy on 22 January in the Southern District of Florida, as reported by Indy100. Chapter 11 bankruptcy allows companies to continue operating while they restructure their debts under court supervision. The filing came weeks after it was reported that the company’s secured lender planned an auction of its assets, which has now been canceled.
The brand received $60 million in funding from Eurazeo Brands in 2018, valuing the company at more than $1 billion, according to WWD. Last year, industry sources said the brand’s sales were around $50 million.
In February, Pat McGrath Labs had secured a $30 million financing package from the financial firm GDA Luma.
Image: Yvonne Tnt/BFA.com
