Beauty brand Morphe’s parent company FORMA Brands has initiated voluntary Chapter 11 proceedings in order to facilitate the sale of its assets for $33 million. The sale is part of an agreement that FORMA’s parent company, FB Debt Financing Guarantor, reached with an entity controlled by the agent under FORMA Brands’ existing secured debt. These lenders include Jefferies Finance and funds managed by Cerberus Capital Management and FB Intermediate Holdings.
The creditors plan to take over Morphe’s wholesale operations, online platforms and international retail stores, subject to court approval. The proposed transaction is subject to receipt of higher or better offers, court approval and other customary conditions.
FORMA Brands plans to use the transaction to strengthen its financial position and help execute its long-term growth strategy, which includes a pivot toward wholesale and ecommerce operations. The company is in the process of closing all 18 of its U.S. stores, though it confirmed in a tweet that stores outside the U.S. will remain operational.
“Over the last year, FORMA Brands has been implementing initiatives to stabilize our business and reposition our organization for long-term growth,” said Simon Cowell, President of FORMA Brands in a statement. “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. 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.”