Morphe Makeup Brand To Be Acquired by Lenders — Retail Bum

Forma Brands, the parent company of Morphe makeup, has agreed to be acquired in exchange for $690 million in debt relief from lenders Jefferies Finance LLC and Cerberus Capital Management, according to a court filing.

The company filed for bankruptcy in January 2023 after its business faced a series of setbacks when Morphe terminated partnerships with several celebrities and influencers. The decision had a catastrophic impact on the business as Morphe was heavily reliant on influencer marketing. At its peak, the company was worth $2 billion, with sales reaching $400 million in 2019.

Forma Brands, which is dependent on Morphe for approximately 80% of its sales, also faced challenges due to supply chain disruptions and a decline in consumer interest in color cosmetics. As a result, revenue fell short of the company’s internal projections by around 20% in 2021, according to a company document reviewed by Bloomberg News.

Before the downturn, the brand experienced massive success with product collaborations featuring internet celebrities like Jeffree Star, Jaclyn Hill, and James Charles, who have millions of subscribers on YouTube. These collaborations, which regularly sold out within minutes, contributed to over 40% of the brand’s revenue between 2016 and 2019.