Beauty retailer files Chapter 11; plans sale
Beauty Brands has declared bankruptcy.
The moves comes just weeks after the Kansas City-based beauty products and services retailer announced it would close 25 stores, leaving it with 33 locations, and reduce its corporate staff. Hilco Merchant Resources LLC is acting as the stalking-horse bidder for the 33 Beauty Brands locations that will remain open while a buyer is sought. Hilco will also conduct the going-out-of-business sales for 23 of the 25 locations previously announced for closure, with Beauty Brands conducting the liquidation sales at two stores itself.
Beauty Brands, which owes $6.9 million on a secured loan and $11 million in unsecured debt to suppliers and landlords according to court documents, is requesting for additional bids by Feb. 4, with an auction set for Feb. 7.
“As we move through the process, it will be business as usual at our 33 stores that remain open as we pursue a sale transaction,” stated Caryn Lerner, CEO, Beauty Brands. “Our objective is to complete a sale of our 33 stores and emerge from Chapter 11 in a strong position and move forward as a successful brand.”
Beauty Brands’ bankruptcy filing comes as the beauty sector is booming, online and in stores. But the retailer has struggled under intense competition from beauty powerhouses Ulta Beauty and Sephora and as more traditional retailers, such as Target and Walmart, have ramped up their beauty offerings.
The moves comes just weeks after the Kansas City-based beauty products and services retailer announced it would close 25 stores, leaving it with 33 locations, and reduce its corporate staff. Hilco Merchant Resources LLC is acting as the stalking-horse bidder for the 33 Beauty Brands locations that will remain open while a buyer is sought. Hilco will also conduct the going-out-of-business sales for 23 of the 25 locations previously announced for closure, with Beauty Brands conducting the liquidation sales at two stores itself.
Beauty Brands, which owes $6.9 million on a secured loan and $11 million in unsecured debt to suppliers and landlords according to court documents, is requesting for additional bids by Feb. 4, with an auction set for Feb. 7.
“As we move through the process, it will be business as usual at our 33 stores that remain open as we pursue a sale transaction,” stated Caryn Lerner, CEO, Beauty Brands. “Our objective is to complete a sale of our 33 stores and emerge from Chapter 11 in a strong position and move forward as a successful brand.”
Beauty Brands’ bankruptcy filing comes as the beauty sector is booming, online and in stores. But the retailer has struggled under intense competition from beauty powerhouses Ulta Beauty and Sephora and as more traditional retailers, such as Target and Walmart, have ramped up their beauty offerings.