UPDATE: February 5, 2019: FullBeauty Brands won approval of its prepackaged bankruptcy in 24 hours. The restructuring plan hands over the company's ownership to a group of lenders and slashes $900 million in debt.
Dive Brief:
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FullBeauty Brands filed for bankruptcy on Feb. 3 in the U.S. Bankruptcy Court for the Southern District of New York, listing $1 billion to $10 billion in liabilities, according to court documents acquired by Retail Dive. FullBeauty did not immediately respond to Retail Dive's request for comment.
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U.S. Trustee William Harrington filed an objection to the prepackaged Chapter 11 plan, stating that the company is seeking to confirm a plan in less than 24 hours, which would, "enable them to race through the Chapter 11 too quickly," according to court documents. FullBeauty filed a response to address the objections stating that the company provided sufficient notice of the confirmation hearing and that all parties impacted, including the top 30 unsecured creditors, were provided notice of the plan.
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Court documents reveal that the company entered into a restructuring support agreement on Dec. 18, 2018, which ultimately allowed FullBeauty to prepare for the filing date with a prepackaged restructuring plan.
Dive Insight:
FullBeauty announced in early January that it expected to obtain support from debt and equity holders to file Chapter 11. What was not anticipated was the company's plan to exit bankruptcy in under 24 hours. The proposal depends on the bankruptcy court's approval, which was not obtained as of press time.
Restructuring is expected to slash the company's debt by nearly $900 million, based on earlier information provided by FullBeauty, allowing it to continue operations as it turns around the business.
While the company conducts all its business online versus relying on physical locations, FullBeauty has experienced increased competition as more apparel companies move to inclusive sizing. In the past year, Universal Standard expanded its size range from 00 to 40, Old Navy added extended sizes to stores and Target introduced a wider size range to two of its private label apparel lines, among others.
According to court documents, the company's largest unsecured creditor is Hong Kong-based KGS Sourcing Ltd, which is owed $38.9 million, followed by FedEx, to which it owes $6.7 million.
FullBeauty is owned by Apax Partners and Charlesbank Capital Partners, and has a number of brands under its umbrella including Woman Within, Roaman's, Jessica London, Swimsuits for All, Ellos, KingSize, BrylaneHome and fullbeauty.com.
