Is Morphe going out of business? Forma Brands, the parent company of Morphe, is considering Chapter 11 bankruptcy. The company has approximately $600 million to $700 million in debt. People familiar with the process told BeautyMatter that the company was considering various options to strengthen its financial position but that no final decision had been made.
Forma Brands is involved in constructive discussions with its financial stakeholders. This is done regarding ways to strengthen the company financially. Also, it helps to reinforce their focus on the opportunities they see ahead for their brands. A company spokesperson said they are excited about the products and will keep bringing them to their customers.
According to the WWD, this had happened due to a combination of factors. Factors such as the pandemic lowering demand for color cosmetics and scandals involving Morphe’s key faces, Jefree Star and James Charles, may be the cause. Also, supply chain disruptions have affected sales. Let us view in brief Morphie’s financial conditions.
DiscontinuedNews is impartial and independent, and every day, we create distinctive, world-class programs, news, and content that inform, educate and entertain millions of people worldwide.
Morphe Cosmetics are also referred to as “Morphe Brushes.” It is legally identified as Morphe Holdings, stylized as MORPHE. It is a cosmetics and beauty manufacturing company based in Los Angeles, founded in 2008. The company provides direct-to-consumer digital retail distribution of personal care and cosmetics through collaborations with social media influencers. Morphe severed ties with several partners after they became deeply involved in controversy.
Morphe Holdings revealed in August 2019 that it had formed a new collaboration with General Atlantic, which would acquire a significant stake. Further conditions of the transaction were not disclosed. However, Morphe’s current shareholders will remain as the company’s shareholders.
Morphe.com, Morphe stores, Ulta.com, Ulta stores, and direct Online Amazon.com stores are all authorized retailers of the company. Also, these authorized Morphe retailers can only ensure a genuine Morphe product.
Why Morphe stores closing in 2023?
Linda and Chris Tawil are siblings who purchased Morphe in 2008. They bought them at a trade show-based brush operation. This gradually builds it into a packed beauty brand through influencer collaborations. General Atlantic, a private equity firm, obtained a 60% stake in Morphe Cosmetics in 2019 for $2.2 billion. Morphe was noted to be on track to do nearly $500 million in net sales with about $130 million in EBITDA at the time of purchase.
Forma Brands was founded shortly after the purchase in 2019. They formed a global growth-focused beauty forum. Also, it served as an incubator, accelerator, and curator of next-generation beauty products. The company also released Morphe 2, a skincare line called Bad Habit, and Jaclyn Hill’s Jaclyn Cosmetics.
They also purchased two brands of products from Manzanita-owned Space Brands. They are Playa Beauty and the Lipstick Queen. Covid-19, the decline in the color cosmetic category, and supply chain issues have all troubled the company.
Cutting relations with Jeffree Star and James Charles, two longtime cash cow collaborators, following accusations of racism and sexual misbehavior made these difficulties much worse.
Myles McCormick, who oversaw the company’s boom period, was succeeded as chairman and CEO in March by former Too Faced executive Eric Hohl. The Morphe brand represented the Instagram and YouTube periods of the millennial generation. But times have changed, and Gen Z has gone to TikTok. If Forma Brands can turn this thing around, Only time will reveal.
Is Morphe still in business?
A proposed class-action complaint has been filed against Morphe Cosmetics. They state that it intentionally engaged in misleading marketing, unfair business practices, and negligence. Product liability is in connection with the creation and distribution of “inherently harmful” makeup.
Crystal Damato, Amanda Montgomery, and Taylor Maxwell contend in their complaint that Morphe is selling eye cosmetics that contain color additives and ingredients. These are unsafe when used in the immediate eye area, and they fail to warn customers. This can cause the dangers associated with such well-known hazards.
Also, the product’s packaging fails to include any warning regarding the known risk associated with the intended use of the product. There are indications like a tiny symbol of an eye with a line through it, which fails in every aspect to warn consumers of the known hazards. Thus, they should have alerted users to the risks of using the products as intended.
Damato, Montgomery, and Maxwell claim that they are additional consumers who suffered damages. The plaintiffs claim implied warranties and misleading advertising in light of the above. In addition, unfair practices, carelessness, and strict product liability are being claimed.
They are requesting damages exceeding $5 million and injunctive relief. They also need a certification of their class action to allow as many as “tens of thousands of other people” who have been harmed by Morphe to join the pool of plaintiffs. A Morphe spokesman was unavailable to comment on the case right away.
Is Morphe FDA approved?
According to a proposed class action lawsuit, cosmetics manufacturer Morphe LLC failed to inform customers that some of its products are unsafe to use as intended near the eyes.
The U.S. Food and Drug Administration (FDA) has judged several of Morphe’s eyeshadow palettes, eyeliners, and Colorfix 24-Hour Cream Color products to be unsuitable for cosmetic use near a person’s eye. This is by the 52-page lawsuit filed in April in California.
The complaint asserts that using Morphe cosmetics in the eye area might result in various risks. This includes severe eye irritation, skin discoloration, staining, rashes, allergies, and other painful situations.
Is Morphe an ethical brand?
The lawsuit charges that the defendants actively instructed and encouraged consumers, including children, to use the products. “This is a manner that defendants should have known was extremely unsafe and unlawful.”
According to the lawsuit, anyone who purchased the Morphe products was financially harmed. This is because they bought makeup they thought was safe and instead got items that were “extremely hazardous and imperfect.”
Morphe LLC and its co-defendants, Morphe Management Holdings LLC, are accused of misleading advertising of their makeup products. They mislead to use in the eye area while trying to conceal that beauty products comprise harmful color additives.
Based on the case, Morphe referred to some of its eyeshadow palettes as “artistry palettes” or “pressed pigments.” This is to avoid liability for promoting the makeup as eyeshadow. According to the lawsuit, using these expressions is confusing and dangerous because “pressed pigments” are “indistinguishable” from the eyeshadow. They have only one reasonable use, cosmetic application to the eye area.
The lawsuit seeks to cover residents of the United States. This includes those who purchased the Morphe eye makeup mentioned on this page during the “maximum term permitted by law.”
According to the complaint, “Defendants’ alleged disclaimer does nothing to assist the consumer in recognizing the known risks of using Morphe Eye Makeup, nor does it recommend that any known dangers exist.”
Morphe has traveled long since its early roots as a brush brand based in Los Angeles. The now-international cosmetic brand has evolved into a bonafide social media sensation. It was lauded by nearly every influencer and beauty tutorial out there.
Despite being central to Morphe’s brand philosophy, the company has never posted its animal testing policy. It has not been certified cruelty-free by reputable organizations such as Leaping Bunny or PETA.
In addition to mica, palm oil, shea butter, and animal products, the brand heavily depends on petrochemicals. Paraffin—a natural fossil fuel, is found in dozens of Morphe products. Also, it contains an unidentified fragrance and a slew of other chemical ingredients. Morphe does not claim to be sustainable and cannot be classified as such.