Beauty’s immediate post-pandemic sales high has painted a picture of robust growth for the industry. But sales gains may have papered over some cracks in the market that are now starting to show.
Last week, Black-owned makeup brand Ami Colé announced it would shut down operations in September. In May, clean British beauty brand and Unilever-owned Ren Skincare also ceased operations, citing market challenges that made long-term success unsustainable, in a statement. Meanwhile, conglomerate Kose America wound down its US operations of makeup brand Addiction Tokyo, while Shiseido, The Estée Lauder Companies (ELC) and Coty have cut jobs in 2024 and 2025 as part of broader cost-cutting efforts amid the market pressures. Experts say these developments reflect a growing tension that is reshaping the playbook for both emerging and established brands.
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For Ami Colé, a combination of retail, investment and operational pressures as detailed in the founder, Diarrha N’Diaye-Mbaye s op-ed for The Cut contributed to its closure. “Climbing tariffs and marketing costs are brutal for small brands like mine,” she said.
The beauty market is still growing. Global management consultant firm McKinsey forecasts the $450 billion global industry will expand by 5 per cent annually through 2030 — a modest slowdown from the 7 per cent growth between 2022 and 2024. Yet beneath that momentum lies a high-pressure brand environment: rising costs of product goods, operations and customer acquisition, cautious consumer spending, the fallout of US tariffs and intensifying competition — all factors forcing companies to confront how sustainable their models really are.
“While the beauty market is performing reasonably, there has been a slowdown in growth over the past couple of years,” says Neil Saunders, managing director at Globaldata, a retail analyst firm. “Some of this is caused by weaker consumer sentiment and finances. Brands also face cost increases from tariffs, which is unhelpful. These problems are exacerbated by the fact that there are so many new brands and product launches, so even in a market that is growing, some firms are losing share and seeing sales decline.”
Pressure points
Brands like Ren Skincare and Ami Colé entered the market with a clear cultural positioning (clean beauty and inclusive beauty, respectively), but experts say that a clear niche is no longer enough. In an environment where operational costs are rising and shelf space is becoming more crowded, it’s difficult for smaller, niche brands to stand out, and they have to evolve with rising consumer expectations and changing shopping habits.
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Ishbel Lohman, strategy director at London-based branding agency Bloom, says the clean beauty category became “table stakes” and has saturated shelves in recent years. Ren Skincare was a pioneer at launch, but it became challenging to stand out from the crowd.
At the same time, the sheer volume of entrants is providing customers with a plethora of options. Over 25 per cent of global brand launches now come from beauty and personal care, up 4 per cent in 2024 from the year prior, according to data analytics firm Euromonitor, while new launches in home care, comparatively, declined 23 per cent in the same year. “The beauty and personal care industry is experiencing a rebound in innovation, with product launches increasing at retailers. Now, as competition intensifies, tracking successful products is key for brands to stand out, as well as refining new product development strategies to meet the evolving needs of beauty consumers,” says Egle Tekutye, innovation consultant at Euromonitor.
For Ami Colé, retail volatility proved intensely difficult. “I couldn’t compete with the deep pockets of corporate brands; at retail stores, prime shelf space comes at a price, and we couldn’t afford it,” said N’Diaye-Mbaye in the article.
To combat this, experts consider that brands (niche or established) need to pair cultural relevance with operational muscle. “It’s about culture. It’s about people,” says Lohman. “Tracking what they want and need, and putting that at the heart of your business. That’s what keeps you relevant and keeps your edge.”
Large players aren’t immune, with market pressures coupled with lapping tariff headwinds. On Coty’s Q3 2025 earnings call, which detailed the headwinds facing fragrance and colour cosmetics, the beauty conglomerate’s CEO Sue Nabi described a “structural shift” in retail dynamics, pointing to Amazon and TikTok Shop as challengers to traditional retail models. “We are seeing our retailers being very aggressive on their inventory management,” added Coty CFO Laurent Mussien.
ELC is executing its ‘Beauty Reimagined’ turnaround plan following sales decline in 2024 and 2025. CEO Stéphane de La Faverie described the restructuring (including 7,000 job cuts and a shift to regional P&Ls and a focus on fast-growing retail channels) as a fundamental move to overhaul operations and increase speed and innovation for greater consumer share. “We are significantly transforming our operating model to be leaner, faster and more agile while taking decisive actions to expand consumer coverage, step-change innovation and increase consumer-facing investments to better capture growth and drive profitability,” he said in the Q2 earnings call.
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Meanwhile, Shiseido announced job cuts as part of a broader restructuring plan to prioritise margin rebuild by 2026. In the Chinese group’s Q1 2025 earnings call, president Kentaro Fujiwara noted growing pressures from market-sensitive consumers and the need to accelerate the innovation of local Chinese skincare brands like Winona and Proya to stand out from the competition. The group plans to cut underperforming SKUs from across the portfolio, refocus its China business and invest in R&D (research and development) to regain relevance in the market where consumer loyalty is wavering more than ever before.
The road ahead
Experts agree that the beauty industry and brands navigating the new reality are entering a more disciplined and demanding phase. In place of viral campaigns and blockbuster launches, sustainable growth will increasingly depend on operational discipline, retention-focused strategies and a sharper understanding of consumer behaviour. “This is a structural recalibration of how beauty brands are built and scaled,” says Juan Pellerano-Rendon, chief marketing officer at Swap, a e-commerce operating system that manages operations for DTC brands.
Even brands like Hailey Bieber’s Rhode are adapting after rising to online fame for three years from Bieber’s social capital and direct-to-consumer (DTC) drops, now shifting to a broader distribution model. The expansion reflects the new market reality: long-term success requires operational discipline and infrastructure, not just influence.
For Pellerano-Rendon, the next competitive edge lies in execution. “Too much margin is lost in the way businesses run,” he says. As growth moderates and margins tighten, brands will need to evaluate performance across the entire value chain — from supply chain efficiency to fulfillment and cost control. The brands most likely to endure, he adds, will be those that adopt a disciplined, omnichannel mindset and continually reassess where and how they show up. “Operational slack, once tolerated in the high-growth era, is now a critical liability.”
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Retention versus reach will define the next phase of performance, says Fallon Lowery, co-founder and creative director at creative agency Blanc. Tomi Talabi, founder of The Black Beauty Club, a social enterprise focused on cultural community building agrees: “There’s a fundamental gap in how some businesses understand their customer.” “They launch DTC, grow quickly, then jump into retail before learning how their customers shop, what makes them return and where they lose interest. That kind of overextension catches up fast in today’s climate.”
The retention of engagement-driven models will now mean rethinking influencer marketing in favour of longer term, credibility-focused partnerships; building continuous feedback loops with customers; and ensuring that retention isn’t siloed within marketing, but integrated across product development and operations. “Retention should be a cross-functional mandate,” says Pellerano-Rendon. “It starts with product quality, but also includes delivery, service and being present where your customer expects you. Brands can’t afford blind spots.”
The broader market outcome is expected to be a period of consolidation. Brands with clear positioning, operational agility and authentic consumer connection are likely to endure. Talabi notes that inclusivity will remain critical, but success will depend on pairing purposes with robust infrastructure such as data-driven product pipelines and deeply engaged communities. Additionally, Nnenna Onuba, strategic growth & M&A adviser; founder of 100 Allies, an initiative that seeks to improve diversity in the beauty boardroom, adds that brands with capital flexibility should see the current shakeout as an opportunity. “Founders who move quickly can use this moment to bring A-grade specialists onto their bench — project by project, not payroll first,” Onuba says.
Still, Talabi cautions, more disruption lies ahead. “Ren and Ami Colé’s closure and Shiseido’s layoffs are likely just the beginning of this reshaping,” she says. “The brands that remain on shelf will be sharper, better capitalised and more resilient.”
This article has been updated.
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