Pat McGrath Labs Files for Chapter 11 Bankruptcy, Cancels Auction

Pat McGrath Labs has pulled its quality empire from auction aft filing for Chapter 11 bankruptcy conscionable earlier the merchantability was acceptable to begin.

On Jan. 26, a spokesperson for the constitution marque confirmed the Chapter 11 filing, saying the institution plans to proceed operating portion moving toward semipermanent stability, WWD reported.

“During this process, the institution volition proceed operations successful the mean people of concern portion moving to restructure its equilibrium expanse and to forge a way to thrive,” the spokeswoman for Pat McGrath Labs said successful a statement. “Pat McGrath Labs remains committed to its community, customers, partners and stakeholders arsenic it continues delivering its signature, high-quality products and culture-defining artistry and innovation.”

The bankruptcy filing comes conscionable implicit a period aft reports surfaced of a planned auction for the constitution company, created by the celebrated editorial and runway constitution creator Pat McGrath. Reports indicated the institution was up for sale, with Hilco Global overseeing an auction scheduled for Jan. 26.

The planned auction was acceptable to see assets pledged by Pat McGrath Cosmetics, LLC, and its founder, Dame Pat McGrath. However, connected Jan. 22, Pat McGrath Labs filed a voluntary Chapter 11 petition successful the U.S. Bankruptcy Court for the Southern District of Florida.

The Chapter 11 filing indicates the institution has clip to reconstruct profitability, arsenic it allows it to proceed operating portion restructuring its debt. Hilco Global, the auction facilitator, has since removed Pat McGrath Labs’ listing from its website.

The bankruptcy filing comes conscionable implicit a decennary aft McGrath launched Pat McGrath Labs successful 2015 with Gold 001, a $40 metallic foil that sold retired successful minutes and acceptable the brand’s buzz-driven model. The institution raised $60 cardinal from Eurazeo Brands successful 2018 astatine a valuation reportedly exceeding $1 billion, but successful caller years has faced operational struggles, enforcement turnover, and layoffs. Once valued acold higher, the brand’s worthy has since declined sharply, with Eurazeo softly exiting its involvement and income reportedly totaling astir $50 cardinal past year.

Despite the company’s struggles, McGrath remains successful precocious demand, astir precocious serving arsenic quality manager for Louis Vuitton’s La Beauté constitution collection.

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