11.04.22
Birchbox, the one-time delivery darling of the beauty industry, is considering bankruptcy.
Birchbox’s parent company, FemTec Health, sent a letter to creditors earlier this week advising them of bankruptcy proceedings and suggested they consider opting into shares of FemTec.
“We believe, in the best interests of Birchbox and the entire FMTC family of companies spanning the US and Europe, a Chapter 11 or some equivalent structure may be necessary,” the letter read.
The letter gives creditors the option to receive shares in FemTec Health in the full amount of their obligations. “We cannot negotiate separate deals with more than 150 creditors,” the letter continued. “If we can come to an agreement regarding this new Class A Preferred Stock, FMTC will commit to continue to building Birchbox.”
Birchbox was founded in 2010 by Katia Beauchamp and Hayley Barna as the original beauty subscription box service, but the company has struggled in recent years. The letter said Birchbox’s revenue projections dropped from $74 million to $47 million, even following a $30 million infusion from FemTec. Earlier this year, Beauchamp was appointed CEO of Victoria Beckham Beauty.
Birchbox has struggled for years. In 2020, the company laid off 44 of its 94 New York employees. Prior to the pandemic, the company opened a store in Washington, DC and a brick-and-mortar store in SoHo, New York, and later developed a partnership with Walgreens to bring prestige beauty to the drugstore giant’s shelves.
Birchbox is the latest beauty business to go bust. Makeup brand Lilah B. announced its closure last month; Morphe parent company Forma Brands is said to be weighing similar restructuring options, including Chapter 11.
Birchbox’s parent company, FemTec Health, sent a letter to creditors earlier this week advising them of bankruptcy proceedings and suggested they consider opting into shares of FemTec.
“We believe, in the best interests of Birchbox and the entire FMTC family of companies spanning the US and Europe, a Chapter 11 or some equivalent structure may be necessary,” the letter read.
The letter gives creditors the option to receive shares in FemTec Health in the full amount of their obligations. “We cannot negotiate separate deals with more than 150 creditors,” the letter continued. “If we can come to an agreement regarding this new Class A Preferred Stock, FMTC will commit to continue to building Birchbox.”
Birchbox was founded in 2010 by Katia Beauchamp and Hayley Barna as the original beauty subscription box service, but the company has struggled in recent years. The letter said Birchbox’s revenue projections dropped from $74 million to $47 million, even following a $30 million infusion from FemTec. Earlier this year, Beauchamp was appointed CEO of Victoria Beckham Beauty.
Birchbox has struggled for years. In 2020, the company laid off 44 of its 94 New York employees. Prior to the pandemic, the company opened a store in Washington, DC and a brick-and-mortar store in SoHo, New York, and later developed a partnership with Walgreens to bring prestige beauty to the drugstore giant’s shelves.
Birchbox is the latest beauty business to go bust. Makeup brand Lilah B. announced its closure last month; Morphe parent company Forma Brands is said to be weighing similar restructuring options, including Chapter 11.