Don’t Pity Pat

There are some names in fashion and beauty that stop being names and become entire eras. Pat McGrath is one of them. Before there was a brand, there was a woman backstage, building the visual language of modern beauty with her hands. For decades, she defined the faces of couture; working with houses like McQueen, Prada, and Versace, and shaping what modern glamour looks like. When Pat McGrath Labs launched in 2015, it did not feel like a startup. It felt like a long-overdue fashion house finally opening its doors. The first product sold out in minutes, and within a few years the company reached a valuation of more than $1 billion after major private equity investment.

But billion-dollar headlines are not the same thing as billion-dollar foundations. Behind the scenes, the company was shaped not only by artistry, but by investors, lenders, and the expectations that come with rapid growth. Private equity money is not patient. It wants scale, speed, and predictable returns. It wants numbers that grow quarter after quarter. That kind of structure works for tech platforms and fast-moving consumer brands. It is far less natural for a founder-led, creatively driven company built on vision and cultural influence. Over time, the gap between the valuation and the business reality became harder to ignore, and the company’s valuation dropped significantly as financial pressures mounted.

In January 2026, Pat McGrath Labs filed for Chapter 11 bankruptcy protection in the United States, halting an imminent auction of the company’s assets and allowing it to restructure its debts while continuing operations. The filings indicated tens of millions in liabilities and hundreds of creditors, with the company estimating between $100 million and $500 million in assets and debts combined. Chapter 11 does not mean the brand disappears. It means the business is attempting to reorganize itself financially. But symbolically, it marks a dramatic reversal for a company once hailed as a beauty unicorn.

So how does one of the most influential makeup artists in the world end up negotiating with lenders over the future of her own brand? The answer is structural. Reports indicated that a secured lender had already begun the process of auctioning the company’s assets, in some cases without the founder’s consent, before the Chapter 11 filing paused the sale. This is the quiet danger of scaling a founder-named brand through outside capital: the name becomes collateral. When debt enters the structure, the brand, and sometimes even the founder’s intellectual property can become part of financial negotiations.

This is where the story becomes especially relevant for women founders, and for those of us building businesses rooted in culture, sustainability, and legacy. For many creatives, our name is our first and most powerful form of capital. It carries our reputation, our relationships, our history, and our future. When that name becomes part of a financing deal; licensed, pledged, or tied to debt, it stops being purely yours. It becomes an asset on a balance sheet. And in moments of financial distress, assets get negotiated, sold, or restructured. The question is not just what happens to the company. The question is what happens to the name.

There is also a sustainability lesson here, even in the beauty industry. Sustainable fashion and beauty are built on slower cycles, deeper meaning, and intentional growth. But venture money often demands the opposite: speed, expansion, and constant novelty. When a brand rooted in artistry and cultural authority is forced into a high-growth financial model, something has to give. Analysts have pointed to challenges such as slower product development and difficulty competing in a fast-moving, social-media-driven market. In many ways, this is not just a bankruptcy story. It is a cautionary tale about growth at all costs, and the danger of building creative brands on financial models that were never designed for them.

Should Pat McGrath have stayed private? Maybe. Maybe not. It is easy to say that in hindsight. But the real lesson is not about one decision. It is about understanding what kind of business you are building from the beginning. Is it a venture-scale company meant to grow as fast as possible? Or is it a cultural institution meant to last decades? Those are two very different structures, with two very different consequences.

And yet, even as the company restructures, the woman remains untouchable in her cultural impact. Pat McGrath’s career cannot be liquidated. Her influence cannot be auctioned. She is still shaping the face of fashion, still being called into the most powerful rooms, and was recently appointed creative director of Louis Vuitton’s new beauty line. The business may be in Chapter 11, but the legacy is not.

For founders, especially creative founders, there is a quiet but powerful lesson in this moment. Ownership is not just about equity percentages or valuations. It is about control. It is about how your name is used, who has a claim to it, and what happens to it when the market turns. Because for many of us, our name is not just a brand. It is our inheritance, our reputation, and sometimes, the only capital we were given to start with.

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Sources

1. Allure: Pat McGrath Labs Filed for Chapter 11 Bankruptcy (Jan 2026)

2. The Times: Pat McGrath built a $1bn beauty empire. Why did it collapse? (2026)

3. Global Cosmetics News: Chapter 11 filing details (Jan 2026)

4. Beauty Independent: bankruptcy assets, liabilities, and creditors

5. Secured Finance Network / USA Today reporting: liabilities over $50M

6. Retail Dive: lender-initiated asset auction details

7. Essence: restructuring and asset sale context

8. TheStreet: valuation decline and Chapter 11 filing