US retailer Beauty Brands has filed for Chapter 11 bankruptcy protection and will close 25 stores, according to a report by WWD.com.
Court papers stated that 33 locations will remain open, with Hilco Merchant Resources acting as the stalking horse bidder for these stores while also being lauded to oversee the end-of-business sales for 23 of the locations that will cease trading.
According to a company statement Beauty Brands will itself oversee the going-out-business sale of two further locations – Ahwatukee, Arizona, and Lincoln, Nebraska, with additional bids to be received by 4 February, an auction on 7th February and sale hearing on 8th February.
Beauty Brands, which is backed by private equity firm TSG Consumer Partners, said its “liquidity and financial position has been adversely affected by declining sales and rising costs associated with doing business as a predominantly ‘brick and mortar’ retailer.”
The news follows years of attempting to re-position itself within the market, with 11 new store openings failing to perform as expected.
Caryn Lerner, CEO of Beauty Brands, stated, “As we move through the process, it will be business as usual at our 33 stores that remain open as we pursue a sale transaction. Our objective is to complete a sale of our 33 stores and emerge from Chapter 11 in a stronger position and move forward as a successful brand.”