Gloss Angeles Podcast Summary

Episode: Debunking Common Misconceptions About the Rhode Acquisition
Release Date: June 3, 2025
Hosts: Kirbie Johnson and Sara Tan

Introduction and Personal Anecdotes [00:34 - 01:59]

The episode begins with Kirbie and Sara exchanging greetings and sharing personal anecdotes. Sara mentions her father Greg Tan’s birthday, adding a personal touch to the conversation. They humorously discuss minor tech experiments, like Sara using FaceApp on Greg, and highlight the daily interactions they have with their father through his "outfit of the day" photos. This segment sets a friendly and relatable tone for the episode.

ELF’s Acquisition of Rhode: Initial Reactions and Misconceptions [01:31 - 05:18]

Kirbie and Sara delve into the major news of ELF acquiring Rhode, expressing their excitement and surprise. Kirbie shares her initial reaction, “[02:31] Kirby: I was like, I can't. I was so excited to tell you this information, I was like, Rhode is selling to ELF? This is crazy.” They address the widespread attention the acquisition has received, noting how it dominated headlines and social media discussions.

Key Misconceptions Addressed:

1. Price Increases Due to Acquisition [03:18 - 05:18]:

   • Kirbie: “The first one that we've seen is that ELF increased their prices because of the Rhode acquisition.”
   • Sara: Confirms that prior to the acquisition news, both Naturium and ELF had already announced a $1 price increase.
   • They clarify that the price hike was part of ELF’s tariff mitigation strategy, not directly due to the acquisition.
   • Official Statement from ELF: “[03:28] Kirby: They said, pricing is a part of our overall tariff mitigation plan that has three key vectors, pricing, supply chain optimization and business diversification.”

2. ELF as a Conglomerate [05:18 - 06:40]:
   Kirbie compares ELF’s trajectory to major conglomerates like L’Oréal and Coty, suggesting ELF is positioning itself to become a dominant player in the beauty industry. They reflect on past rumors about Rhode's potential acquisition and how ELF emerged as the actual acquirer.

   • Kirbie: “[05:18] We felt that L’Oréal was not the right pick.”

Details of the Acquisition Deal [06:40 - 10:16]

The hosts break down the financial and strategic aspects of the acquisition:

• Financial Terms:

  • Sara: “[07:14] The acquisition includes $800,000 in cash and $200 million in ELF stock, with an additional $200 million contingent on performance over the next three years.”
  • They emphasize that while the headline figure wasn’t a full billion dollars, the stock component significantly enhances the deal's value.

• Strategic Importance:

  • Kirbie: “[08:18] Road has doubled their consumer base and made $212 million with just nine SKUs.”
  • Highlighting Rhode’s impressive growth without extensive paid marketing, the hosts underscore why ELF found Rhode an attractive acquisition.

• Role of Hailey Bieber:

  • Sara: “[10:16] Hailey is stepping away from Rhode. She is not only founder but also the Chief Creative Officer and Head of Innovation.”
  • Kirbie: Emphasizes Hailey’s integral role and the strategic advisor position assigned to her by ELF, showcasing her ongoing influence.

Comparison with Other Major Acquisitions [10:16 - 16:43]

Kirbie and Sara compare ELF’s acquisition of Rhode to other significant deals in the beauty industry:

• IT Cosmetics and Facial Beauty:

  • Kirbie: “[14:35] In 2016, IT Cosmetics sold to L’Oréal for $1.2 billion cash.”
  • Sara: Mentions Faced by Estee Lauder for $1.44 billion, highlighting the celebratory parties that followed these acquisitions.

• ASAP and Deciem:

  • Kirbie: “[15:52] In 2023, ASAP was acquired by L’Oréal for $2.5 billion, the highest at that time.”
  • Sara: Notes Deciem’s full acquisition by Estee Lauder in 2024 for $1.7 billion.

The hosts point out that Rhode’s rapid acquisition within three years is unprecedented compared to these longstanding brands, positioning ELF as a formidable new conglomerate.

Future Implications for ELF and Rhode [16:43 - 19:37]

Pricing Strategy:

• Kirbie: “[16:32] Will Rhode decrease their prices? No. Point blank, period.”
• Emphasizes that Rhode will maintain its masstige pricing model as it expands into Sephora, targeting a different customer base and ensuring price stability.

Operational Synergies:

• Sara: Predicts collaboration between Rhode, ELF, and Naturium, although Kirbie mentions doubts about shared manufacturing facilities.
• They speculate on potential product development and supply chain optimizations resulting from the acquisition.

Industry Impact:

• Sara: “[19:37] This is really great for the beauty industry.”
• The hosts believe the acquisition signals a robust future for celebrity-owned beauty brands and could inspire other brands to seek acquisitions by larger conglomerates like ELF.

Tower 28’s Sunscreen Controversy [20:04 - 35:31]

Shifting focus, Kirbie and Sara discuss the recent drama surrounding Tower 28’s SOS Face Guard broad-spectrum SPF 30 sunscreen.

Claims vs. Reality:

• Product Description: Marketed as having “no white cast” and being suitable for all skin types, including those with conditions like eczema and rosacea.
• Julian Sass’s Review:
  • Kirbie: “[24:05] He reached out to the Tower 28 team prior to posting this particular review.”
  • Julian Sass criticized the product for leaving a visible white cast despite claims of being cast-free.

Brand’s Response:

• Sara: Amy, the founder, issued an apology acknowledging the oversight:
  • Sara: “[25:03] Amy posted an apology stating they failed their customers by missing the mark on truly cast-free formula.”

Community Reactions:

• The hosts highlight the disappointment within marginalized communities, particularly Black consumers, who feel the claims excluded their skin tones:
  • Kirbie: “[30:40] People of color, specifically Black women, were upset as they felt the marketing didn’t account for their experiences.”

Industry Standards and Marketing Practices:

• Kirbie: “[36:06] The term 'no white cast' has become so pervasive that it’s often used misleadingly, similar to how 'gluten-free' was overused.”
• They discuss the broader issue of misleading marketing in the mineral sunscreen industry and the need for greater transparency.

Personal Experiences and Takeaways:

• Both hosts express their continued support for the product despite its flaws, emphasizing the importance of the apology and commitment to improvement:
  • Kirbie: “[35:28] I have no doubts in Amy. She will fix this.”
  • They acknowledge the beauty of the formula and the brand’s genuine intention to serve all customers.

Conclusion and Audience Engagement [35:31 - 37:56]

Kirbie and Sara wrap up the episode by reflecting on the significance of the Rhode-ELF acquisition and the Tower 28 controversy. They encourage listeners to share their thoughts on social media and engage with the topics discussed. The hosts express optimism for the future of both brands and the beauty industry as a whole, celebrating the transparency and resilience demonstrated by Rhode and Tower 28.

Call to Action:

• Kirbie: Invites listeners to discuss their opinions on Rhode and ELF's collaboration and share their experiences with Tower 28’s sunscreen.
• Emphasis on community feedback and ongoing conversations about industry standards and brand responsibility.

Notable Quotes

• Kirbie on ELF Acquisition Excitement [02:38]: “I was so excited to tell you this information, I was like, Rhode is selling to ELF? This is crazy.”
• Sara on Price Increases [03:29]: “But when a lot of people pay a dollar, that is beneficial for the company.”
• Kirbie on Hailey Bieber’s Role [10:16]: “Hailey is stepping away from Rhode. She is not only founder, but she's chief creative officer and head of innovation.”
• Kirbie on Community Reactions [30:40]: “It just feels like you're playing in their face when you're like, it's universal. And it's like, so then do I not matter? Did you not see me?”
• Kirbie on Marketing Practices [36:06]: “The term 'no white cast' has become so pervasive that it’s often used misleadingly, similar to how 'gluten-free' was overused.”

Final Thoughts

This episode of Gloss Angeles offers an in-depth analysis of ELF’s acquisition of Rhode, debunking prevalent misconceptions and highlighting the strategic significance of the deal. Additionally, the hosts provide a critical examination of Tower 28’s recent sunscreen controversy, emphasizing the importance of honest marketing and inclusivity. Through engaging discussions and expert insights, Kirbie Johnson and Sara Tan deliver a comprehensive and enlightening episode for beauty enthusiasts and industry professionals alike.