Beauty and makeup brand Pat McGrath Labs files for Chapter 11 bankruptcy
Pat McGrath Labs is seeking loan approval after filing for Chapter 11 bankruptcy with more than $50 million in debt.
After a decade of using pressed powders and intensely pigmented shadows, the Pat McGrath Institute is filing for bankruptcy.
The company, founded in 2015 by namesake makeup artist Pat McGrath, filed for Chapter 11 bankruptcy on January 22, according to court documents reviewed by USA TODAY. In its filing in the Southern District of Florida, the company listed more than $50 million in debt.
USA TODAY has reached out to McGrath’s attorney for comment.
However, the cosmetics company’s application does not yet mean the death of traditional brands. In a Jan. 25 court filing, McGrath’s lawyers said the founders wanted to “continue business operations as usual in order to preserve property values, preserve jobs, and facilitate an orderly restructuring.” In an emergency application, the company asked for approval to make a $1 million loan to its debtors to keep the business afloat and pay its employees.
The bankruptcy filing comes on the heels of news that the company plans to auction off its brand assets. That auction has now been postponed indefinitely, WWD reports. Chapter 11 bankruptcy is primarily considered an emergency shutdown of a business, allowing it to reorganize with the help of its debtors. The debtor and business then work together to come up with a plan to repay creditors over time.
It marks a stunning fall from stardom for McGrath, who rose from working-class roots to beauty and fashion royalty as the company looks to rebuild. The makeup artist, who initially worked for companies like Armani and Procter & Gamble, struck out on her own in 2015 and built a $1 billion brand under her own name.
McGrath has been honored by the British royal family and has done makeup for all the major runways. She was the lead makeup artist for the 2025 Victoria’s Secret Fashion Show and was also the artist responsible for the glossy, doll-like makeup that made headlines for the 2024 Margiela runway. This trend inspired two of the brand’s products, a setting spray and a face mask, both named “Skin Fetish: Glass 001.”
McGrath, who was rated as a billionaire in 2018, is likely to maintain her dominance in the beauty field with this latest application. Just this week, she designed the makeup look for Schiaparelli’s celebrity-filled show during Paris Haute Couture Fashion Week. But the move may reflect a larger trend in the retail cosmetics industry, with consumers turning to celebrity-backed brands.
