Beauty has once again proven to be a resilient category but the reality is many businesses are still feeling the after effects of the pandemic compounded by supply chain pressure, rising inflation, fierce competition, and changing market dynamics. For many brands, trouble was brewing before COVID-19 hit. Government assistance and a spike in high-margin DTC online sales prolonged the inevitable.
From smaller brands without the financial cushion to weather volatile sales to larger brands caught on the wrong side of shifting consumer or executive missteps, beauty has not been unscathed by bankruptcies and closures.
Bankruptcies
Revlon, struggling under a debt pile, finally ran out of time, forcing the business owned by billionaire Ron Perelman's MacAndrews & Forbes to file for Chapter 11 bankruptcy in June 2022. The company emerged from bankruptcy in May 2023 as a private company after cutting over $2.7 billion in debt and handing control of the company to its lenders.
BH Cosmetics, majority owned by MidOcean Partners, filed for bankruptcy in January 2022 after betting on celebrity collaborations with Doja Cat and Iggy Azalea to propel sales. In March 2022, Revolution Beauty Group acquired beauty brand BH Cosmetics for $3.9 million.
Closures
H2O+, the 33-year-old brand owned by Pola Orbis, shut down at the end of 2022. H2O+ was acquired by investment firms Cordova, Smart & Williams LLC, and Goldman Sachs Urban Investment Group in 2008. In 2011, Pola Orbis acquired the business when it had 2,000 points of retail distribution in 22 countries.
Vapour Beauty, the luxury natural color cosmetics brand, was the second investment in clean beauty by Ancora Investment Holdings, made in July 2018. The business underwent a complete rebrand released in 2019 to elevate its brand positioning. The brand shut down at the end of 2022.
Clean indie beauty brand Lilah B, founded by beauty industry veteran Cheryl Yannotti Foland, was shut down at the end of 2022. The brand has raised a total of $3.8 million since its launch in 2015, including a $3 million series A in 2020.
Lora DiCarlo was one of the brands capitalizing on the category tipping point of the sexual wellness trend, founded in 2017 by Lora Haddock. Backed by five patents developed in partnership with Oregon State University and $6.6 million in funding, the brand shut down.
HGGC-backed Nutraceutical Corporation has shuttered Aubrey Organics after over 50 years in business. In July 2016, Aubrey Organics was sold to Nutraceutical Corporation. At the time of sale, the brand had over 200 SKUs and distribution in over 4,500 retail outlets across the country, dominating the natural beauty category.
