Retail
5 Retail Giants Filing For Bankruptcy In 2022 Between growing debt, dwindling sales, inflation, and changing customer preferences, many retailers have become vulnerable. Here’s a look at some retail giants that filed for bankruptcy in 2022.
BH Cosmetics Sector: Beauty In January 2022, Los Angelesbased BH Cosmetics filed for Chapter 11 bankruptcy. The direct-to-consumer brand admitted in court papers it faced “increased competition” in the beauty category, rising material costs, and supply chain disruptions, amongst other challenges, according to a report by WWD. Launched in 2009, the company produced vegan and cruelty-free cosmetics and cemented several celebrity collaborations, including with Doja Cat and Iggy Azalea. The company also had large creditors based in China that were owed over $5.9 million. In February 2022, BH Cosmetics was bought out of bankruptcy by U.K.-based Revolution Beauty Group, which acquired certain BH intellectual property assets and inventory for $3.9 million, consolidating the retailer into the group’s operations
Missguided Sector: Apparel British retailer Missguided fell into administration in May 2022 over unpaid debts, equivalent to Chapter 11 bankruptcy in the U.S. The fast fashion business was established in 2009 as a pure-play digital retailer and struggled to make a profit in the last few years, according to a BBC report. In December 2021, Alteri Investors acquired a 50% stake in the brand in an F O R B E S M I D D L E E A S T.C O M
attempt to help with its debt. Once a popular label with Generation Z consumers, Missguided was hit by cost surges, delivery disruption, and reduced demand during the pandemic. Saved by collapse again, billionaire Mike Ashley’s Frasers Group bought Missguided out of administration for nearly $24 million in June 2022, one month later the company changed its name to MGL Realisations (2022) Limited.
Revlon Sector: Beauty Cosmetics titan Revlon filed for Chapter 11 bankruptcy in June 2022, attributing the move to challenging macroeconomic issues, including heavy debt load, supply chain disruptions, and surging costs. The New Yorkheadquartered company
was founded in 1932 and went public in 1996. Revlon had $3.3 billion of long-term debt as of December 2021, and was too cash-poor to make timely payments to its suppliers in its cosmetics supply chain. However, after securing the support of all its major creditor groups, a settlement deal was announced in February 2023. In May 2023, Revlon emerged from bankruptcy as a private company after cutting over $2.7 billion in debt, leaving it with nearly $1.5 billion of outstanding debt. Revlon’s lenders took ownership of the company in exchange for debt reduction, erasing any existing shareholder equity value.
Future Retail Sector: Retail chain operator An Indian court accepted
in July 2022 the Bank of India’s petition to admit debt-ridden retail chain operator Future Retail into the bankruptcy resolution process. The brick-andmortar company was established in 1987 under Manz Wear. The bankruptcy proceedings ensued after Future Retail defaulted on loans and its lenders rejected a $3.2 billion buyout by Reliance Retail amid a legal battle with Amazon. As of April 2023, 49 prospective bidders had submitted their interests to acquire the company through the corporate insolvency resolution process, including Reliance Retail, Jindal Power, WHSmith Travel, and Gordon Brothers & Payard Investments’ Consortium.
M&Co Sector: Apparel In December 2022, Scottish label M&Co fell into administration for the second time after collapsing in 2020. As of early November 2022, M&Co had around $15 million of overdue supplier payments. Its trading performance was affected by high inflation, increasing the company’s cost base, and a costof-living crisis impacting consumer behavior. In February 2023, AK Retail Holdings acquired the brand for an undisclosed amount. However, the purchase did not include physical stores, resulting in the closure of all M&Co stores by the end of April. JUNE 2023
BY JAMILA GANDHI ; EYEMATTER/ SHUTTERSTOCK.COM
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