JPMorgan managing director Fei-Fei Zhang explains why cosmetics M&A is accelerating, how buyers separate hype from durability, and what makes beauty brands built to last.
Beauty Moves From Trend to Boardroom Priority
The global beauty industry has firmly captured Wall Street’s attention. Once viewed as a consumer trend driven by fashion cycles, cosmetics has emerged as a resilient, high-margin sector attracting serious capital.
Consulting firm McKinsey estimates the global beauty market could approach $600 billion by 2030, fuelled by social media-led discovery, creator-founded brands, and steady consumer demand. At JPMorgan, beauty is no longer a side coverage vertical. It is now a dedicated dealmaking focus.
At the centre of that push is Fei-Fei Zhang, the bank’s head of beauty investment banking for North America.
Why 2026 Could Be a Breakout Year
Zhang expects deal momentum to accelerate in 2026, driven by what she calls “corporate clarity.” Large strategic players are actively reshaping portfolios, carving out slower-growth assets and reallocating capital toward brands with higher margins and clearer growth runways.
Acquisitions remain foundational to beauty. Strategics are targeting independent, fast-growing brands that fill portfolio gaps, while private equity firms are stepping in earlier, often as a bridge before eventual strategic exits.
The result is a more active, but more selective, M&A environment.
Discipline Has Replaced Deal Frenzy
Beauty’s appeal to private equity remains strong. The category benefits from repeat purchases, stable demand across economic cycles, and attractive cash flow characteristics.
What has changed since the deal boom of 2021 is discipline.
According to Zhang, buyers now apply higher thresholds on scale, profitability, brand equity, and operational maturity. Growth alone is no longer enough. Investors want evidence that brands can sustain momentum without relying solely on viral exposure.
Social Media. Powerful, But Not Sufficient
Social platforms have reshaped how beauty brands are built. Influencers can propel products from obscurity to cult status almost overnight.
In the boardroom, however, social engagement is treated as one input, not the conclusion.
Buyers assess whether a brand has a differentiated identity, defensible positioning, and the ability to convert attention into loyalty. Rapid growth raises a key question. Can the brand support long-term demand with supply chains, product pipelines, and organisational depth?
Longevity, not virality, now drives valuation discussions.
What Buyers Look for in a Crowded Market
Zhang says today’s acquirers focus on three core pillars.
First, brand identity. Buyers look for clarity of voice and emotional connection with consumers.
Second, financial durability. Growth must translate into consistent margins and predictable cash flow.
Third, infrastructure. Brands need systems that can scale globally without eroding quality or trust.
In a saturated market, these factors separate brands built for exits from those built for cycles.
Inside the Rhode Deal
Zhang was a senior advisor on the $1 billion sale of Rhode, the skincare brand co-founded by Hailey Bieber, to e.l.f. Beauty.
The transaction reflected JPMorgan’s long-term engagement model. The bank supported Rhode during its growth phase through commercial banking before advising on the strategic sale.
For Zhang, the deal exemplified how early relationships, combined with sector expertise, can guide founders through pivotal moments.
A Career Built Alongside the Sector
Zhang joined JPMorgan as an intern in 2011 and rose through the ranks, becoming managing director in April 2025. Along the way, she pushed internally for deeper investment in beauty, identifying it early as an under-covered but high-potential sector.
Her leadership case was straightforward. Beauty founders needed sophisticated advisors who understood both consumer dynamics and capital markets. Investing early in the sector would earn trust long before exit conversations began.
That strategy has since paid off, with JPMorgan advising on multiple billion-dollar beauty transactions.
Why Beauty Keeps Winning Capital
For Zhang, beauty’s appeal is structural, not cyclical.
The category combines emotional connection with everyday utility. Consumers return regularly, margins remain resilient, and innovation cycles stay fast without heavy capital intensity.
In an environment where investors are cautious and selective, those traits matter.
The Long View on Beauty M&A
Looking ahead, Zhang expects fewer speculative bets and more intentional acquisitions. The winners will be brands that balance cultural relevance with operational discipline.
Social media may open the door, but fundamentals decide who stays.
For Wall Street, beauty is no longer just glamorous. It is durable, strategic, and increasingly central to dealmaking conversations heading into 2026.
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Fei-Fei Zhang, a managing director at JPMorgan Chase, helped steer the firm’s work on the $1 billion sale of Rhode, the beauty brand co-founded by Hailey Bieber. Courtesy of JPMorgan
Source & Photo: Business Insider
