Birchbox Said Weighing Options, Including Bankruptcy
Birchbox is weighing its options, including Chapter 11 bankruptcy, sources have told WWD.
In a letter to creditors sent Tuesday, Birchbox’s parent company FemTec Health, which acquired the business last year, said those owed money from Birchbox could opt into shares of FemTec instead.
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“We believe, in the best interests of Birchbox and the entire FMTC family of companies spanning the U.S. and Europe, a Chapter 11 or some equivalent structure may be necessary,” the letter read.
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.
The letter also gave 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.”
FemTec did not respond to a request for comment.
Birchbox has reportedly struggled. In 2020, the company confirmed to WWD it would lay off 44 of its 94 New York employees. In its heyday, the company operated 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 joins a recent wave of struggling beauty businesses. 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.
This past summer, Beauchamp was announced as the new chief executive officer of Victoria Beckham Beauty, having taken on an advisory role at Birchbox.