Beauty brand BH Cosmetics has filed for Chapter 11 bankruptcy in Delaware, US.
Founded in 2009, the Gen Z and Millennial-focused name lent itself as a vehicle for celebrity beauty launches, including those of Grammy-nominated singer Iggy Azalea and American rapper Doja Cat.
Almost ten years after its introduction, BH was taken over by private equity group MidOcean Partners, but plans for a promising future have been scuppered by the Covid-19 pandemic.
Court documents revealed that declining revenues were insufficient to support the business’ operations and plans have been drawn up to sell its intellectual property for US$4.3m, according to WWD.
During the peak of the pandemic, sales of BH’s colour cosmetics fell off a cliff from $55.8m in 2019 to $33.6m in 2020.
“The debtors have also struggled to obtain profitability after pursuing an ultimately unsuccessful launch of various product lines,” BH’s Chief Restructuring Officer, Spencer Ware, wrote in a statement.
Colour was one of the most affected beauty categories during the pandemic, as appetite took a downturn with more customers switching to skin and self-care routines.
In February last year, Becca Cosmetics – a Estée Lauder Companies-owned beauty brand, which held collaborations with members of the Kardashian clan – also took the ‘heartbreaking’ decision to close its operations due to the impact of Covid-19.
Ceasing trading in September the same year, it said that ‘an accumulation of challenges’ meant that the business could no longer continue to run.
Centric Brands, the maker of beauty products for Disney and Warner Brothers, also filed for bankruptcy protection in 2020, citing the pandemic as the catalyst for its struggles.
“The pandemic disrupted many of our wholesale accounts’ ordering and constrained our cash flow,” Centric Brands’ CEO, Jason Rabin, said at the time.
