BY Fraser Tennant
Following a string of supply chain issues and store closures, global multi-brand beauty company Forma Brands, the parent company of cosmetics manufacturer Morphe, has filed for Chapter 11 bankruptcy protection.
In addition to the filing, Forma Brands’ holding company FB Debt Financing Guarantor has entered into a definitive asset purchase agreement with a group of secured lenders, which will acquire all of Forma Brands’ assets.
The proposed transaction is expected to significantly strengthen Forma Brands' financial position and provide additional support for the execution of its long-term growth strategy, which will focus largely on the company's global wholesale and e-commerce operations.
“Over the last year, Forma Brands has been implementing initiatives to stabilise our business and reposition our organisation for long-term growth,” said Simon Cowell, president of Forma Brands. “This agreement is a testament to the strength of our brands most meaningful to our consumers, including Morphe and Morphe 2.”
Moreover, Forma Brands has received a commitment for approximately $33m in debtor-in-possession (DIP) financing from the investor group, which, subject to court approval, will be available to support the business and its operations throughout the court-supervised sale process. The agreement with the investor group includes Forma Brands' wholesale operations, online platforms and international Morphe retail stores.
“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,” continued Mr Cowell. “We are excited to reinforce our focus on opportunities and to continue bringing our thoughtfully selected beauty products to consumers through our individual online brand platforms, retail partners and Morphe stores outside the US.”
Throughout the Chapter 11 and sales process, Forma Brands’ customers can continue to shop the company’s portfolio of brands through the brands' online platforms, at leading specialty retailers and through the company's international Morphe retail stores.
Mr Cowell concluded: “We appreciate the continued support of our financial partners and believe this is the best path forward for Forma Brands as we position the business for the long term.”
News: Forma Brands Enters Into Agreement To Be Acquired By Group Of Secured Lenders