Birchbox stops taking orders on UK site amid Chapter 11 reports in the US
Pioneering beauty subscription service Birchbox has halted orders on its UK website amid reports it is investigating the possibility of entering Chapter 11 bankruptcy protection in the US.
A notice on the retailer's UK website reads "Birchbox is facing a host of unprecedented setbacks that are affecting all our members. We currently are no longer fulfilling orders or shipping subscription boxes. We will update our members in due course when we have more information available."
Founded in the US in 2010 by Harvard graduates Katia Beauchamp and Hayley Barna, Birchbox was a pioneer in beauty sampling and spawned a host of copycat businesses and services.
At the height of its success Birchbox was said to be worth around $500 million and had 2.5 million active users across the globe and partnerships with 800 brands.
It also ventured into physical retail with stores in New York (opened in 2014) and Paris, and, in the UK it had staged pop-ups on London's Carnaby Street and in Selfridges Oxford Street.
In 2018 the business began sale talks with QVC, which eventually fell through. However a majority stake was then acquired by one of its investors Viking Global, who had previously led a $60 million funding round in Birchbox in 2014. US drug store chain Walgreens then took a stake and opened 11 Birchbox in-store experiences in its branches.
The business began to falter, however, as the pandemic hit and brands and retailers launched their own beauty box services. Birchbox was sold to beauty start-up FemTec Health for $45 million in November 2021 with CEO Katia Beauchamp selling off all of her remaining shares and eventually exiting the business. She was recently appointed CEO of Victoria Beckham Beauty.
Reports in the US emerged last week that Birchbox was investigating the possibility of entering into Chapter 11 bankruptcy protection. According to WWD, creditors were contacted by FemTec Heath, via a letter which read: "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 offered creditors shares in FemTec Health to the value of their obligations and were advised that if they accepted, FemTecHealth could continue to build Birchbox. It pointed out that Birchbox’s revenue projections dropped from $74 million to $47 million, even following a $30 million injection of cash from FemTec Health.
