A week after makeup brand Morphe took to Twitter to announce that it would be closing all its US stores, parent company Forma Brands filed for Chapter 11 bankruptcy. According to a statement from Forma, their assets will be acquired by investors and they will be getting about $33 million in financing from that group. As part of the sale, the company has entered Chapter 11. “This agreement is a testament to the strength of our brands most meaningful to our consumers, including Morphe and Morphe 2,” says Simon Cowell, president of Forma, in the statement. “We will have additional financial resources available to invest in our multi-category portfolio, product launches, and innovative brand and marketing strategy as we advance our vision to inspire creativity, promote inclusivity, and connect with consumers around the world through beauty.”
It is not yet clear what exactly that looks like for Morphe and other brands associated with Forma, but industry sources have told Allure that Ariana Grande is working toward finalizing an agreement to take all operations in-house for her brand, r.e.m beauty. Those sources say Forma has never had an ownership stake in r.e.m beauty, but under a licensing agreement has overseen product development, manufacturing, and marketing.
Following the closure of Morphe stores, but before this bankruptcy filing, Allure reached out to Forma to ask what this meant for the future of the other brands in its portfolio — like Bad Habit (launched in 2020 with YouTube sensation Emma Chamberlain as creative director), Jaclyn Cosmetics (from YouTuber Jaclyn Hill), and Playa Beauty (founded by former fashion stylist Shelby Wild) — and the company declined to comment. Representatives for Bad Habit, Jaclyn Cosmetics, and Playa all referred us back to Forma. R.e.m. beauty has not yet responded to a request for comment.
Morphe was founded in 2008 in Los Angeles and gained the beauty spotlight thanks to its affordable prices and a steady stream of product launches. They became known for their large eye shadow palettes, some of which featured up to 42 shades — a stark contrast to other popular brands at the time offering eye shadow quads and palettes with fewer shades. Morphe also rose to fame through influencer partnerships, with names like James Charles and Jeffree Star, that yielded social media buzz and allowed the makeup brand to stay current amid an ever-changing online landscape. In 2019, according to Bloomberg, Morphe reached $400 million in revenue.
But there’s a risk in relying so heavily on influencers and social media buzz can fade quickly. (Star had been accused of using racist language and Charles faced sexual misconduct allegations. Morphe severed ties with both.) In August 2020, in an effort to move away from its reliance on influencer fuel, Morphe rebranded as Forma Brands, an incubator that would both acquire and build other lines.
So far, Forma’s pivot has not been enough. Morphe has shut down its brick-and-mortar retail operations. Wild has exited her brand, Playa Beauty, and filed a lawsuit last month for $15 million in damages. And Chamberlain is no longer affiliated with Bad Habit.
Arguably the biggest feather in Forma’s cap, Ariana Grande, appears to be moving full-steam ahead. An influencer, sure, but first and foremost a music phenomenon, Grande’s launching r.e.m beauty’s new limited edition, thank u, next, collection today and there are rumors on social media that the brand will soon be available internationally at Sephora.