Morphe parent company Forma Brands files for bankruptcy

Forma Brands, the parent company of Morphe, has filed for Chapter 11 bankruptcy in the US and outlined its decision to accept an acquisition deal.

The company said that its direct parent company, FB Debt Financing Guarantor LLC, has entered into a definitive asset purchase agreement with a group of secured lenders, under which all of Forma Brands' assets will be acquired.

The proposed transaction is expected to "significantly strengthen" the company's financial position and provide additional support for the execution of its long-term growth strategy, which will largely focus on global wholesale and e-commerce operations.

Forma Brands added that it remains “committed to collaborating with its global creators and partners to enable its family of brands to bring next-generation beauty products to new and existing audiences. The company's product development initiatives, brand launch plans and marketing collaborations remain in place”.

Throughout the process, customers can continue to shop the company's portfolio of brands through online platforms, specialty retailers and international Morphe retail stores. Earlier this month, Morphe confirmed it would be shutting all of its US stores.

To facilitate the sale process, Forma Brands said its domestic direct and indirect subsidiaries had followed through with a voluntary Chapter 11 filing in the District of Delaware.

The company has received a commitment for approximately $33 million in debtor-in-possession financing from the investor group, which will be used to support the business and its operations throughout the court-supervised sale process.

In connection with the sale, the company has appointed Stephen Marotta as Chief Restructuring Officer. Marotta is a Senior Managing Director at Ankura Consulting Group, with more than 35 years of financial restructuring experience.

Simon Cowell, President of Forma Brands, said: "Over the last year, Forma Brands has been implementing initiatives to stabilise our business and reposition our organisation for long-term growth. This agreement is a testament to the strength of our brands most meaningful to our consumers, including Morphe and Morphe 2.

"We 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."