Pat McGrath Labs has received $10 million in debtor in possession financing.
The financing by GDA Luma was approved by a bankruptcy court. GDA Luma has also made a further commitment of at least $20 million in post-emergence working capital.
As part of the deal, upon exit, GDA Luma will hold a controlling equity interest, while founder Dame Pat McGrath will remain a significant equity owner and continue as chief creative officer.
As previously reported by WWD, Pat McGrath Labs filed for Chapter 11 bankruptcy last month, a move that in turn canceled a planned auction of the brand scheduled by the company’s secured lenders GDA PMG Funding LLC, part of the same investment group as GDA Luma.
At the time, Chapter 11 documents filed on behalf of McGrath stated that despite the strength of the brand, Pat McGrath Labs faced growing financial headwinds in early 2025 including liquidity constraints. It then sought short-term financing to stabilize operations, taking out a $17.5 million loan million from GDA PMG Funding LLC as a temporary bridge while it worked toward a longer-term resolution.
However, by June 2025, it had not been able to refinance or repay the GDA Loan on the timeline originally agreed. Later, GDA asserted that the outstanding amount due under the GDA Loan is in excess of $43 million and subsequently began the auction process, according to McGrath’s affidavit.
McGrath’s affidavit states that she began Chapter 11 proceedings to halt the auction.
After decades on the fashion week circuit, pioneering runway looks from studded lips to gilded eyebrows, Pat McGrath launched the makeup line in 2015 with Gold 001, a $40 gold, multipurpose pigment. The limited-edition product, sold in a bag full of custom sequins (standard packaging for many products in the line), sold out 1,000 units from her website in six minutes and kicked off a series of product drops.
In 2018, the brand received $60 million in funding from Eurazeo Brands. At the time, industry sources said the firm was estimated to have taken a 5 to 8 percent stake in the business at a valuation of more than $1 billion.
But in recent years the brand, sold at both Sephora and Ulta Beauty, among others, has struggled with operational challenges and undergone executive changes and layoffs while its valuation is now said to be a fraction of what it once was. A few years ago, Eurazeo quietly sold its stake.
The brand’s sales were around $50 million last year, according to industry sources.