Beauty Independent reported the shutdown of the cruelty-free beauty and lifestyle subscription box business Kinder Beauty.

WHO: Founded in 2019 by longtime activist Andrew Bernstein and vegan actresses Daniella Monet and Evanna Lynch, Kinder Beauty is a cause-driven, 100% vegan, cruelty-free beauty subscription box. Each monthly box contains five products for just $25. The business launched a skincare brand, KND by Kinder Beauty, with three serums priced under $40 in February 2023.

WHY: According to r/BeautyBoxes, shutdown behavior began in October with a lack of engagement on social media, an inability to customize December boxes, and a 50% sale promotion through the holidays. An interview with Beauty Independent in March 2023 shared that the brand was in a pivot to address gross margin issues caused by supply issues and price increases. 

IN THEIR OWN WORDS: “Kinder Beauty has never been profitable,” Andrew Bernstein, co-founder and CEO of Kinder Beauty, wrote in an email to Beauty Independent dated January 5. “At the end of November, we learned that our long-time primary funding source was unexpectedly backing out of the relationship. Since then, we’ve been unable to find the financing necessary to keep the business operating. On top of that, our rising liabilities now far exceed our assets, and we’re not generating nearly enough revenue to get ahead of the situation.”

DETAILS:

• The company reportedly owes $500,000 to unsecured creditors with between $55,000 to $90,000 in available funds, which will be used to reach settlement agreements in an attempt to avoid filing for Chapter 7 bankruptcy.
• The largest secured creditor is its third-party logistics provider, which is owed $400,000 and has a lien on inventory. The second-largest secured creditor, Shopify Capital, is owed $56,000.
• A majority shareholder is its largest unsecured creditor, having loaned the business $1.2 million over the last year, and wants to receive “certain intangible assets of the business” in lieu of a cash settlement.
• According to Pitchbook, the business raised $800K in seed funding in April 2021 and an undisclosed amount of angel funding in 2020. Investors in the business are Labor Capital, Strivv, and Cambridge Way Ventures.