When Even Iconic Brands Face Reality

When Even Iconic Brands Face Reality

A founder lesson on scale, pressure, and sustainability

Headlines move fast.

This week, news circulated that Pat McGrath Labs has entered a Chapter 11 process, with assets being prepared for a bidding process. For a brand once celebrated as a billion-dollar unicorn, it caught many people off guard.

But for founders who’ve been in the room raising capital, scaling teams, expanding globally this story isn’t as shocking as it might seem.

And it’s not a failure story.

It’s a business reality story.

Chapter 11 isn’t collapse it’s strategy

Let’s be clear: Chapter 11 is not the same as shutting down. It’s a restructuring tool. A way to protect operations, reassess obligations, and create breathing room under pressure.

What this moment really highlights is something founders are rarely told once success arrives:

Brand power does not eliminate financial complexity.

Visibility does not remove risk.

Valuation does not equal liquidity.

And scale magnifies everything including strain.

The uncomfortable truth about growth

From the outside, iconic brands look untouchable. From the inside, they are navigating:

• High operational burn rates

• Inventory and supply chain commitments

• Investor expectations tied to aggressive growth

• Global expansion costs that arrive long before profit does

When momentum slows or markets shift even the strongest brands must pause and recalibrate.

That’s not weakness. That’s leadership.

The real founder lessons here

This moment offers important reminders for founders at every stage:

1. Scale amplifies pressure, not security

The bigger the business, the smaller the margin for error. Growth without structural resilience is fragile.

2. Valuation is not cash in the bank

A headline number doesn’t mean liquidity. Cash flow discipline matters at every level.

3. Iconic branding still needs boring fundamentals

Systems, forecasting, timing, and financial controls don’t disappear once you “make it.”

4. Longevity is built quietly

The businesses that last are often the ones that slow down, reassess, and make uncomfortable decisions early.

A founder-to-founder reflection

If a globally recognised, culturally influential brand can face this kind of moment, it reinforces why early-stage and growing founders must prioritise structure as much as visibility.

At Forty60, we don’t believe founders fail because they lack talent or vision.

They fail when momentum outpaces foundations.

This isn’t a cautionary tale meant to scare you.

It’s a reminder meant to ground you.

Success is rarely linear.

Sustainability is intentional.

And recalibration is often the smartest move a founder can make.

Real lessons. Real founders. Real growth.

The Forty60 Club

Where founders learn what the headlines never explain.