Morphe Parent Files for Bankruptcy and Seeks Sale to Lenders

Morphe’s parent company has filed for bankruptcy and is to be acquired by secured lenders.

Beauty brands builder Forma Brands said in a Thursday (Jan. 12) press release that by initiating bankruptcy proceedings for itself and its domestic subsidiaries, FB Debt Financing Guarantor will facilitate the sale to secured lenders Jefferies Finance, Cerberus Capital Management and FB Intermediate Holdings.

The proposed transaction is subject to other offers and court approval, according to the press release.

“Over the last year, Forma Brands has been implementing initiatives to stabilize our business and reposition our organization for long-term growth,” Forma Brands President Simon Cowell said in the release. “This agreement is a testament to the strength of our brands most meaningful to our customers, including Morphe and Morphe 2.”

Cowell said that with the agreement, the firm will have more resources available to invest in its portfolio and to continue to serve customers outside the United States.

Forma Brands had already announced that it was already closing all the Morphe stores in the U.S. This followed a more than two-year period in which the company failed to see revenue growth despite its deals and sold-out collaborations with online personalities who have tens of millions of followers, Bloomberg reported Thursday.

Those influencers are now unsecured creditors of Forma Brands, with two of them being owed a combined total of $3.4 million, according to the report.

The company told the bankruptcy court that both its assets and its liabilities total at least $500 million, the report said.

Beauty brands have faced challenges in the connected economy.

As PYMNTS reported in June, cosmetics brand Revlon filed for bankruptcy at the time amid challenges facing all beauty brands, which have traditionally relied on in-person, tactile experiences at the counter of brick-and-mortar stores.

Forma Brands debuted in August 2020 as a newly restructured company focused on developing and marketing health and beauty brands for Gen Zers and millennials.

Cowell told PYMNTS at the time that the company would act as an incubator to create original brands, an accelerator to invest and partner with like-minded brands, and a curator and retailer to serve customers at Morphe stores and global eCommerce sites.

“Forma portfolio brands and products are selected, acquired or created to appeal to our audience’s tastes, needs and price points,” Cowell said at the time.

The agreement announced Thursday includes the wholesale operations, online platforms and international Morphe retail stores of Forma Brands, according to the press release.

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