Claim: Morphe Filing for Bankruptcy Following Lawsuit

Question

There were a few TikToks discussing how Morphe was using unsafe ingredients for their makeup products. According to this source, lawsuits have been filed and now Morphe is filing for bankruptcy. What exactly is going on with the company at the moment?

https://www.tiktok.com/@thelawyerangela/video/7189382161932487982

Answer 1

Morphe Cosmetics is filling for bankruptcy. This comes after multiple lawsuits not only pertaining to their cosmetics themselves but directed at the company for late rent, false advertising and lack of support for their subsidiaries. In January they confirmed to NBC that they were in fact filling for a Chapter 11 bankruptcy and closing all of their store fronts.

So why is this happening? NBC credits this to Gen Z. They are moving away from the bright colors and heavy makeup of the maximalist designs that Morphe is known for and moving towards a minimalist style. NBC claims "the brand saw sales drop from $500 million in 2020 to $295 million in 2021." Losing money is detrimental to any company but it especially hit Morphe Cosmetics. 

Morphe Cosmetics is closing all U.S. retail stores. Employees say they were left in the dark. (nbcnews.com)

Answer 2

According to the website Allure, Morphe has decided to file for Chapter 11 bankruptcy. At this moment, brands such as r.e.m beauty, Jaclyn Cosmetics, and Playa Beauty that fall under Morphe do not have statements at this time. 

https://www.allure.com/story/morphe-forma-brands-bankruptcy-news

Answer 3

The claim that Morphe has filed for bankruptcy is true. Indeed, according to Philips Law Group article, Morphe filed for bankruptcy, which has stalled the class 11 action suit against them. According to the article, “However, the proposed class action was stayed and administratively closed after Morphe’s parent company Forma Brands filed for Chapter 11 bankruptcy on January 12.” The class action suit has come to a close and company operations have been severely hampered.

Link to Article: https://www.phillipslaw.com/blog/morphe-class-action-stalls-after-bankruptcy/

Answer 4

After an extreme deep dive to uncover what is actually happening with Morphe, it appears that they have filed for Chapter 11 Bankruptcy. Very shortly after all of their US retail locations closed, they announced this filing. According to Dani James, Morphe struggled heavily throughout the pandemic, seeing as no one really needed makeup during lockdown. Additionally, Morphe has recently had to cut ties with multiple different partners for reasons that have not been officially disclosed. James also stresses that Morphe itself is not the one filing for bankruptcy, but rather the parent company, Forma has. Forma emphasized in the statement cited by James that rather than this being a business ending decision, it is rather a business repositioning decision. So although they are filing bankruptcy, they should not be ending as a business entirely.

https://www.retaildive.com/news/morphe-parent-company-files-chapter-11-bankruptcy-Forma/640253/