What occurred to Birchbox? | Retail Dive

As soon as an icon in subscription-based retail, magnificence firm Birchbox is now radio silent, leaving some distributors with out pay and prospects with out merchandise. 

The firm’s web site is now not working and generates a “deployment disabled” error message. Primarily based on screenshots Retail Dive took on Jan. 25, the corporate’s web site was nonetheless energetic on the time and customers had been capable of view merchandise. Nonetheless, prospects weren’t in a position to take a look at and would obtain a message about technical difficulties.

The web site is now completely disabled, and screenshots from the web archive Wayback Machine present that this started someday in February.

Birchbox – which turned well-known for promoting curated subscription containers with magnificence samples – was acquired by ladies’s well being firm FemTec Well being in October 2021 for round $45 million. Neither firm has responded to requests for remark.

Birchbox and its mum or dad firm are additionally struggling to pay some distributors. An investigation by Axios in October discovered that FemTec Well being hadn’t paid a number of distributors, together with Fb mum or dad Meta. In an interview, founder and CEO Kimon Angelides advised Axios that the corporate meant to pay distributors as quickly as doable, hopefully by the top of October.

As of January, although, some distributors and a content material creator nonetheless haven’t been paid, in accordance with emails a former worker shared with Retail Dive.

A social media content material creator signed an settlement with Birchbox in Might of 2022 and hadn’t been paid the $2,500 due as of Jan. 24, regardless of a number of emails to the corporate. In an e-mail obtained by Retail Dive from Oct. 4 in regards to the excellent fee, FemTec Chief Advertising Officer Gayle Bock stated “the corporate is out elevating one other spherical of funding and till that’s closed there isn’t a replace.” The content material creator didn’t repsond to requests for remark on the time of publication.

In one other doc obtained by Retail Dive, a legislation workplace representing Bazaarvoice despatched a letter to FemTec Well being on Jan. 10 asking for a fee of $68,927 for companies rendered, with one bill stated to be over six months outdated. A authorized consultant was not capable of present an replace or remark from Bazaarvoice on the time of publication.

Allegations in opposition to FemTec Well being concerning excellent funds have additionally been delivered to courtroom.

On Oct. 26, cosmetics producer and distributor Aromatherapy Associates filed a criticism in opposition to Birchbox and FemTec Well being within the Southern District of New York. The criticism alleges that Birchbox was in breach of a distribution settlement and owed the corporate $226,695.08 for product purchases courting again to 2021. That quantity had not been paid regardless of a number of requests for fee.

Aromatherapy Associates was granted a certificates of default from the courtroom on Dec. 8 after the defendants hadn’t filed a response to the criticism. Aromatherapy Associates didn’t reply to requests for remark on the time of publication.

A breach of contract criticism was filed on Nov. 16 in opposition to FemTec Well being by Wellspring Advisers, a legislation group based mostly in Alameda, California. The criticism alleges that FemTec has “refused and continues to refuse to compensate” the legislation group for companies rendered, with the quantity in query exceeding $75,000.

As of Feb. 8, the courtroom clerk filed a discover to reschedule a case administration convention for the Wellspring Adviser case “in mild of the truth that the defendants haven’t appeared.” Wellspring Advisers didn’t repsond to requests for remark on the time of publication.

A troubled historical past

Previous to its acquisition by FemTec, Birchbox was already exhibiting indicators of pressure. The wonder firm had laid off 25% of its world workers in February 2020, with Birchbox aiming to scale back redundancies and transfer some U.Okay. operations to Spain.

Getting acquired by FemTec supplied Birchbox an opportunity to develop with recent funding.

“I believe that after the pandemic 12 months, which was simply plenty of adjustments and uncertainty, we positively had been excited by the truth that FemTec wasn’t only a massive imaginative and prescient, but it surely was going to be a very well-financed imaginative and prescient,” Birchbox founder Katia Beauchamp advised Retail Dive on the time.

Regardless of being purchased by a well being firm, Beauchamp stated Birchbox was “not making an attempt to go away magnificence in any respect.” Because of the acquisition, Beauchamp turned a strategic adviser however is now not listed as such. It’s unclear when she left that position. As of August 2022, Beauchamp had grow to be the CEO of Victoria Beckham Magnificence, in accordance with her LinkedIn profile.

Because the acquisition, although, Birchbox’s issues have grown. Within the firm’s most up-to-date Instagram put up dated Nov. 7, the corporate advised its greater than 520,000 followers that it was dealing with unprecedented setbacks and was looking for a viable resolution. Across the similar time, FemTec Well being was reportedly contemplating chapter, in accordance with a report from Ladies’s Put on Day by day. In a letter to collectors cited by the publication, FemTec supplied collectors the choice to obtain FemTec shares as an alternative of fee.

Feedback from the previous a number of months on its Instagram put up as of March 2 indicated prospects had been nonetheless ready to obtain containers already paid for and hadn’t been in a position to make use of factors accrued towards purchases.

A majority of the practically 300 Higher Enterprise Bureau complaints in regards to the firm have been filed over the previous 12 months.

“I’ve a credit score of $153 with this firm for subscription containers traded for credit score. I’ve been making an attempt to buy merchandise from them and frequently get a message they’re experiencing difficulties to attempt once more later,” one buyer wrote in a criticism on Jan. 30.

The identical buyer up to date their criticism final week to say the web site gave the impression to be disabled.

The founding of FemTec

Mother or father firm FemTec Well being launched in October 2021 with over $38 million raised, in accordance with an organization press launch. Buyers included Longmont Capital, Ithaca LifeSciences, Unilever Ventures, Shiseido and extra.

The well being group has acquired a number of different corporations along with Birchbox, together with Mira Magnificence, Ava Ladies and Liquid Grids. FemTec Well being additionally launched a DTC field service for well being merchandise in February 2022 referred to as Superior Girl, which nonetheless has an operational web site however hasn’t posted on Instagram since September.

FemTec Well being founder, government chairman and CEO Kimon Angelides has additionally based a number of different corporations.

Angelides based Livongo, which was acquired by Teladoc in 2020 for $18.5 billion. Teladoc recorded a $6.6 billion impairment cost for Q1 in April of final 12 months ensuing from the tough merger.

Angelides — who holds a Ph.D. in accordance with the FemTec web site — additionally based Vivante Well being and Diabetes America.

Whereas some prospects and distributors have waited since final 12 months to listen to from Birchbox, FemTec has an organization web site based mostly in Greece with a copyright date of 2023.