Major Makeup Brand Enters Chapter 11 Bankruptcy Protection
The renowned beauty company Pat McGrath Labs has officially filed for Chapter 11 bankruptcy protection in the United States, revealing liabilities surpassing $50 million (approximately £37 million). Founded by the celebrated makeup artist Dame Pat McGrath in 2015, the brand has accumulated a substantial debt of £36 million, prompting this significant financial restructuring move.
Founder's Vision and Initial Success
In a court affidavit, Dame Pat McGrath articulated her original mission for the brand, stating, "I founded the brand because I wanted to take what I was doing backstage and bring it directly to people." The company's launch product, Gold 001—a $40 metallic foil—sold out within minutes, establishing an early buzz-driven model. During its debut month at a prominent Oxford Street retailer, a Pat McGrath Labs item was purchased every 40 seconds, outperforming any other beauty brand in the store's history.
Commitment to Continued Operations
Despite the bankruptcy filing, the brand has emphatically pledged to maintain its trading activities. A spokesperson for Pat McGrath Labs confirmed, "During this process, the company will continue operations in the ordinary course of business while working to restructure its balance sheet and to forge a path to thrive." The statement further emphasised the company's dedication to its community, customers, and partners, ensuring the ongoing delivery of its high-quality, innovative products.
Financial Challenges and Restructuring Efforts
The Chapter 11 filing, submitted on January 22, provides the company with a crucial window to restore profitability by allowing it to operate while reorganising its debts. This development follows reports from just over a month ago regarding a planned auction for the makeup firm. Pat McGrath Labs, which secured a $60 million investment from Eurazeo Brands in 2018 at a valuation reportedly exceeding $1 billion, has recently encountered operational difficulties, including executive turnover and layoffs.
The bankruptcy proceedings mark a pivotal moment for the iconic brand, as it seeks to navigate its financial woes and emerge stronger in the competitive beauty market.
