Forma Brands, Parent Company of Beauty Brand Morphe, Files for Bankruptcy

The parent company of the beauty brand Morphe has filed for Chapter 11 bankruptcy. The company launched in 2008 with just a handful of professional makeup brushes. It later expanded to include makeup and skincare products.

Morphe really gained momentum in the beauty industry after it was discovered by social media users and began collaborating with a few who had garnered a large following. Although Morphe’s relationships with social media influencers like Jaclyn Hill and Jeffree Star helped grow its brand awareness, it also hurt the company.

What happened to Morphe?

Several social media users affiliated with Morphe came under fire after displaying questionable and even racist behavior. Some social media users also began questioning the quality of Morphe’s products. Those factors alone began impacting Morphe’s ability to sustain. The COVID-19 pandemic also didn’t help.

By January 2023, Morphe had announced that it was shuttering all of its brick-and-mortar stores, though it would continue to sell products online and at Ulta Beauty and Target stores. Forma Brands also filed for Chapter 11 bankruptcy. Allure reported that the company’s assets “will be acquired by investors and they will be getting about $33 million in financing from that group (1).”

What will happen to Morphe?

While it’s not yet clear what will happen to Morphe, companies that seek protection under Chapter 11 bankruptcy often do so in order to stay in business. Under Chapter 11 bankruptcy, which is often referred to as reorganization bankruptcy, a company is allowed to remain open and operating (2). It can also seek new funding if needed.

And according to a statement made by Simon Cowell, the president of Forma, the brand plans on pushing forward. Cowell stated that as a result of the bankruptcy filing, the company “will have additional financial resources available to invest in our multi-category portfolio, product launches, and innovative brand and marketing strategy as we advance our vision to inspire creativity, promote inclusivity, and connect with consumers around the world through beauty.”

When should a company consider filing for Chapter 11 bankruptcy?

Companies that accrue large amounts of debt but wish to continue with operations should consider filing for Chapter 11 bankruptcy. Under this type of bankruptcy protection, you’ll be able to reorganize your financial affairs thereby giving you a chance of reemerging in a better state.

If your business is in debt and you need legal help, the Moody, AL bankruptcy lawyers at Hill, Gossett, Kemp & Hufford, P.C. can help. This group of bankruptcy lawyers will walk you through the process and assess your situation to determine if filing for bankruptcy is a plausible solution. Contact Hill, Gossett, Kemp & Hufford, P.C. today to schedule a time to speak with a skilled Moody bankruptcy lawyer near you.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

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Photo Credit: Phillip Pessar, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons

Sources:

1. https://www.allure.com/story/morphe-forma-brands-bankruptcy-news
2. https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics