Birchbox is evaluating its options, including Chapter 11 bankruptcy, sources told WWD.
In a letter to creditors sent on Tuesday, Birchbox’s parent company, FemTec Health, which acquired the company last year, said those who owed money to Birchbox could opt for shares of FemTec instead.
“We believe that, in the best interests of Birchbox and the entire FMTC family of companies spanning the United States and Europe, a Chapter 11 or equivalent structure may be necessary,” the letter reads.
Birchbox was founded in 2010 by Katia Beauchamp and Hayley Barna as the original beauty subscription box service, but the company has struggled in recent years. The letter said Birchbox’s revenue projections had fallen from $74 million to $47 million, even after a $30 million injection from FemTec.
The letter also gave creditors the option to receive shares of FemTec Health for the full amount of their obligations. “We cannot negotiate separate agreements with more than 150 creditors,” the letter continues. “If we can reach an agreement regarding this new Class A preferred stock, FMTC will commit to continue building Birchbox.”
FemTec did not respond to a request for comment.
Birchbox would have struggled. In 2020, the company confirmed to WWD that it would lay off 44 of its 94 New York employees. At its peak, the company operated a physical store in SoHoNew York, and later developed a partnership with Walgreens to bring prestige beauty on the shelves of the pharmacy giant.
Birchbox joins a recent wave of struggling beauty companies. Makeup brand Lilah B. announced its closure last month; Morphe’s parent company, Forma Brands, would weigh similar restructuring optionsincluding chapter 11.
Last summer, Beauchamp was announced as the new Managing Director of Victoria Beckham Beauty, having taken on an advisory role at Birchbox.