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The golden age of celebrity-backed beauty may be coming to an end, and Amyris has learned the hard way.
The California-based biotechnology and product manufacturing company that combines innovative and sustainable ingredients with the fanfare of celebrity marketing has filed for Chapter 11 bankruptcy in a Delaware court and is planning to offload its consumer brands to improve its liquidity position and capital structure.
Amyris, which manufactures and sells brands including model Rosie Huntington-Whiteley’s makeup label Rose Inc, TV personality Jonathan Van Ness’s haircare line JVN and actor Naomi Watts’s menopausal beauty brand Stripes, said it has secured $190 million of debtor-in-possession (DIP) financing to support day-to-day operations. Its entities outside the US are not included in the bankruptcy proceedings, the company said.
In its court filing, Amyris listed estimated assets in the range of $500 million to $1 billion and liabilities in the range of $1 billion to $10 billion. As the sale process progresses, Amyris will continue to operate its brands, including through retail partners and the brands’ e-commerce platforms, the company said.
The bankruptcy filing comes as beauty companies globally struggle with rising interest rates, high energy prices and heightened competition. Last week, Vogue Business predicted that more beauty bankruptcies were imminent as brands struggle with unsustainable capital structures and financing becomes harder to come by. In the past two years, companies including Revlon, Forma Brands, Beautycon, Birchbox and Becca Cosmetics have entered an insolvency process.
There are also signs that the power of celebrities and influencers may be waning in beauty. After years of helping to drive awareness and sales for brands, many stars have begun launching their own beauty ranges as a way to directly monetise their engaged fan bases. They have also been appealing targets for investment or acquisitions. But, long-term sustainable growth is tough to maintain amid difficult competition and higher interest rates, experts say. As consumers become more wary of misinformation and sponcon, having a big fan base may not be enough.
Amyris began in 2003 with a $42 million grant from the Bill and Melinda Gates Foundation to create a molecule to treat malaria. The company adapted this technology to develop other “clean” ingredients, including sugarcane-derived squalane, which became the star ingredient of its first consumer beauty brand, Biossance, launched in 2016.
The company then appeared to change course as it dived deeper into celebrity brands. Amyris acquired Costa Brazil in March 2021, the clean beauty and wellness brand by former Calvin Klein creative director Francisco Costa; and in April 2022 snapped up Onda Beauty, the clean beauty retailer co-founded by Watts. In January 2023, it launched actor Tia Mowry’s textured hair line 4U by Tia.
Revlon, Forma Brands, Beautycon, Birchbox and Becca Cosmetics have all faced financial challenges in recent years. Rising interest rates, high energy prices and heightened competition are predicted to push more beauty brands over the edge.
However, few celebrity brands have proven to capture market share and consumer interest in the long run, with singer Rihanna’s Fenty Beauty and musician and actor Selena Gomez’s Rare Beauty among the few exceptions. Forma Brands, parent company of makeup giant Morphe, ran into challenges after placing too big bets on famous faces. In January, Morphe shut down all of its physical stores in the US, while Forma Brands entered an agreement to be acquired by a group of secured lenders after it filed for Chapter 11 bankruptcy — pointing to a shift in an industry that for years has been shaped by influencers.
Prior to the pandemic, Amyris was predominantly focused on supplying ingredients to other companies. But, by 2021, a majority of its business was devoted to consumer brands. In February this year, Amyris’s squalane alternative was sold to Swiss manufacturer Givaudan for $200 million in upfront cash and $150 million in a performance-based earnout, along with a long-term manufacturing agreement that valued the total transaction at an estimated $500 million.
In April, Amyris opened a new headquarters in London and sought to bring its approach of using famous faces to help highlight its clean sourcing methods to a more global audience. “[We] do not believe in simply putting a name to a brand. Instead we work on establishing strong, collaborative partnerships based on a mutual passion for sustainability, science and what appeals to their audience,” Amyris president Lee Tappenden told Vogue Business at the time.
By June, the company announced it was cutting jobs to reduce costs and appointed Han Kieftenbeld as new interim CEO, following the resignation of longtime executive John Melo. The firm also said it would look for ways to streamline its portfolio, with a planned cost-reduction target of $250 million.
“Over the past months, we have been hard at work on a strategic transformation plan to reduce costs, improve operational effectiveness and achieve sustainable growth,” said Kieftenbeld, who is also CFO, in a statement announcing the Chapter 11 filing. “We believe the step forward our company has taken today puts us on the best path to address our financial challenges and achieve a comprehensive solution — rooted in Amyris’s ground-breaking science, formulation capabilities and technology.”
“Our aspiration to become the most efficient and productive biotechnology company in our industry has not changed,” he added. “At the end of this restructuring process, we believe that Amyris will emerge as a financially stronger company with a more focused business model and well-defined path to profitability. In turn, we will be poised to grow sustainably alongside our valued partners and make an even greater impact on our world through clean chemistry.”
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