Is Smile Direct Club going out of business? SmileDirectClub is a company that helps people straighten their teeth with clear aligners. But this company is now in big trouble. They’re looking for someone to help them. But they might have to close down for good if they can’t find anyone by November 23.
Four years ago, they got a lot of money from people to start their business, but they have yet to make any money after that. They also had a big fight with another company that does the same thing.
Smile Direct Club tries and stay in business, the people who started SmileDirectClub are giving it some money. But it’s not enough. They said they’ll have to shut down if they can’t find someone to buy their company.
So, the big question is, ‘Is SmileDirectClub going out of business?’ Let’s find out more about it. But before coming to the main topic, let’s find out what SmileDirectClub is.
What Is SmileDirectClub?
SmileDirectClub is a teledentistry company located in Nashville, Tennessee. It was established in 2014 and was co-founded by Jordan Katzman and Alex Fenkell.
SmileDirectClub makes clear teeth aligners using 3D printing. These aligners are an alternative to traditional braces and similar to Invisalign. People talk to licensed orthodontic experts and other SmileDirectClub staff through the Internet. They send impression kits to customers and dentists to look at the teeth molds to do the treatment. The company works with about 225 licensed professionals.
SmileDirectClub has 300 stores in the United States, Canada, Australia, and the UK. But most of the business and dental work is done online.
What Is Going On With SmileDirectClub?
SmileDirectClub has filed for Chapter 11 bankruptcy. The company asked for help by filing for “Chapter 11” on September 29. This means they want to get their money situation sorted out. Also, they’re doing it under the watch of a special court in Texas.
When SmileDirectClub asked for help, it owed $900 million to the people it borrowed from. Or they only had $5 million in their money jar. During their first meeting about this money trouble, the people who started SmileDirectClub gave them an extra $20 million. They said they might provide even more, up to $60 million, if things go well in court.
When companies have money problems like this, they can ask for this Chapter 11 help. It makes things easier for them to find people who might want to buy the company. The good thing is they don’t have to pay all their old debts. Sometimes, the people they owe money to might agree to own a part of the company instead.
SmileDirectClub also has some extraordinary things like ideas and money. They were supposed to get that are valuable. Other dental companies might be interested in these.
It is noted that this money trouble only affects their business in the United States. It would not affect their business in the UK and other countries.
Background Of SmileDirectClub
SmileDirectClub used to work with another company called Align Technology. They sell their teeth aligners. But they had a big fight, and a judge said Align had to close their stores and give back their part of the company. Then, another time, the judge told SmileDirectClub to pay Align a lot of money. It is believed that about $43.4 million was spent, plus some extra money for interest.
In 2018, SmileDirectClub got a lot of money from people who wanted to invest in their company. They were valued at about $3.2 billion. They were first started with help from a group called Camelot Venture Group. Draymond Green, a basketball player, gave them money after using their products.
They started their business in Canada in 2018 and then in the UK and Australia in 2019. They even worked with a singer, Shawn Mendes, to show how a great smile can make you feel confident.
In 2019, they joined with CVS, an extensive pharmacy, to put SmileDirectClub places in their stores. They also partnered with a company called HP to make a lot of 3D-printed molds. They wanted to go public, so they wanted to let people buy company shares. They did that in September 2019, but their claims could have done better on the first day, and they lost some money.
SmileDirectClub got a patent in 2020 for their way of making plastic aligners. But they fought with another company called Candid Care, and a judge canceled the patent.
In 2021, they had a problem with a cyberattack on their computer systems. It cost them about $10 million to $15 million in lost business.
Then, in 2021, there was a shooting at their factory in Nashville, and some people got hurt. The company said they were very sad about what happened.
Now, in 2023, SmileDirectClub is having money trouble. Or they asked for help by filing for Chapter 11 bankruptcy. But they will keep working as usual while they sort things out.
Factors Affecting Their Business
SmileDirectClub has had many troubles since it started in 2014. They got into fights, had to pay big fines, and even had a cyber-attack. There was also an incident at their factory where someone hurt others. But the biggest problem is that they have not made any money since they became a public company in 2019. These factors affected their business.
One reason is that they spent a lot of money making and promoting their products. They also tried to expand to other countries. Then, the pandemic came, and it was tough for them. Because many people who use their services only have a little money. Or the pandemic made things even harder.
They used to send many of their products, called clear aligners, to people. But the number went down because of the pandemic and other problems. Their stock price dropped a lot, which tells us how well the company is doing. It started at $23 but went below $9, and now it’s way down at just 8 cents.
In 2022, they tried to change their business by offering a fancier treatment to compete with another famous brand called Invisalign. They even made new software to show how the treatment would work. But they need more time to get the money they need.
SmileDirectClub says they are going through a significant change as they want to keep helping people with their teeth. They believe this filing for Chapter 11 is the start of a plan to improve and strengthen their business for a long time. They promise to keep offering affordable dental care during this process.
Who Are The Main Competitors Of Smile Direct Club?
SmileDirectClub has some other companies that are like its rivals. These companies are ranked using different things like:
How many customers, how much money they make, how many workers they have, and how much they are worth. However, only some of these companies share their information. So we might only know some of them.
Remember, this is not telling you to buy anything from these companies. It’s just giving you a list of SmileDirectClub’s competition. Now, let’s see who they are!
Invisalign
They are like the big boss of invisible aligners and have been doing it for a long time.
Invisalign has dentists or orthodontists do the treatment in their office. It can be more expensive.
They are worth a lot of money, about $36 billion, and helped many people with their teeth.
Candid
Candid is a newer company, but they make you visit an actual orthodontist as part of the treatment.
Investors like Candid because they have a different way of doing things.
They’ve raised $86 million and helped many people with their smiles.
Byte
Byte is known for making the treatment faster with special devices.
They use special software to plan the treatment by looking at your whole face.
A big company bought them for $1 billion and wants to help 50,000 people by 2025.
PlusDental
This company is from Europe and not just about aligners. They also sell toothbrushes and other dental stuff.
They sold treatments to over 50,000 people and raised $88 million.
They have a significant presence in Europe and lots of employees.
ClearCorrect
ClearCorrect started in Texas when a dentist saw the need for clear aligners.
They sold the company for $150 million without any outside help.
They’ve helped more than six million patients in over 40 countries.
SureSmile
SureSmile has been around since 1999, and a big company bought it.
These are the companies that SmileDirectClub has to compete with. Each of them has its way of helping people with their teeth.
The Future Of Smile Direct Club
SmileDirectClub is well poised for growth in the coming quarters as continued strategic partnerships back it. In the teledentistry industry, its continued expansion is encouraging. However, tough competition and operating loss raise apprehension. SmileDirectClub filed for Chapter 11 bankruptcy protection on September 29, 2023. The company is expected to continue operations generally during the bankruptcy procedure.
According to Yahoo Finance, SmileDirectClub has a market capitalization of $159.3 million. It projects 17.9% growth for the next five years, ahead of the industry’s projected growth rate of 9.7%. The company’s oral care products are now available at over 12,500 retail stores nationwide.
In short, SmileDirectClub’s future is still being determined due to its recent bankruptcy filing. However, the company is expected to continue operations normally during the bankruptcy procedure. It has a promising growth outlook backed by strategic partnerships and also intends to expand its business in the teledentistry space.
Conclusion
In conclusion, we’ve delved into the turbulent journey of SmileDirectClub, analyzing their financial struggles, legal battles, and the broader landscape of teeth alignment services. As of now, the future remains to be determined for SmileDirectClub. In comparison, they’ve faced significant challenges, including bankruptcy and fierce competition. The company’s commitment to a comprehensive recapitalization process offers hope.
Based on the evidence presented, it’s clear that SmileDirectClub is at a critical juncture. But the possibility of revival is still on the table. The road ahead will be challenging, and success is far from guaranteed. Nevertheless, the company’s resilience and dedication to affordable dental care might see them through these troubled waters. The dental industry is dynamic. It is believed that only time will reveal the ultimate fate of SmileDirectClub.