The Fall of Birchbox: Website Shutdown, Supplier Debts, and Parent Company Troubles

Birchbox, a beauty company that was once a flagship in the subscription retail sector, has now fallen silent, with some suppliers unpaid and customers not receiving their purchased products.

The company's website is now inaccessible, displaying an error message stating "Deployment disabled." According to screenshots obtained by Retail Dive on January 25, the site was still active at that time, allowing users to browse products, but they could not complete checkout and received technical error prompts. The website is now completely offline, and screenshots from the Internet Archive's Wayback Machine indicate this change began sometime in February.

Birchbox, known for selling subscription boxes of curated beauty samples, was acquired in October 2021 by FemTec Health, a women's health company, for approximately $45 million. Neither company responded to requests for comment.

Birchbox and its parent company are also currently struggling to pay some suppliers. An Axios investigation in October found that FemTec Health had not paid several vendors, including Meta, Facebook's parent company. Founder and CEO Kimon Angelides told Axios in an interview that the company planned to pay as soon as possible, hoping to complete payments by the end of October.

However, as of January, emails provided to Retail Dive by a former employee showed that some suppliers and a content creator had still not received payment. A social media content creator who signed an agreement with Birchbox in May 2022 had still not received the $2,500 owed as of January 24, despite multiple email reminders. In an October 4 email about unpaid amounts obtained by Retail Dive, FemTec's Chief Marketing Officer Gayle Bock stated that "the company is in the process of raising a new round of funding and has no updates until that funding is complete." The content creator did not respond to a request for comment at the time of publication.

In another document obtained by Retail Dive, a law firm representing Bazaarvoice sent a letter to FemTec Health on January 10 demanding payment of $68,927 in service fees, with one invoice allegedly overdue by more than six months. Legal representatives were unable to provide an update or comment from Bazaarvoice at the time of publication.

Allegations of unpaid amounts against FemTec Health have also been taken to court. On October 26, cosmetics manufacturer and distributor Aromatherapy Associates filed a lawsuit against Birchbox and FemTec Health in the Southern District of New York. The complaint alleges that Birchbox breached a distribution agreement, owing the company $226,695.08 for product purchases dating back to 2021, and that despite multiple requests for payment, the amount remains unpaid. On December 8, the court granted Aromatherapy Associates a certificate of default after the defendants failed to respond to the complaint. Aromatherapy Associates did not respond to a request for comment at the time of publication.

On November 16, Wellspring Advisers, a law firm based in Alameda, California, filed a breach of contract lawsuit against FemTec Health. The complaint alleges that FemTec "has refused and continues to refuse" to compensate the firm for services already rendered, with the disputed amount exceeding $75,000. As of February 8, the court clerk filed a notice to reschedule the case management conference "due to the defendant's failure to appear." Wellspring Advisers did not respond to a request for comment at the time of publication.

A rocky history

Before being acquired by FemTec, Birchbox had already shown signs of strain. In February 2020, the beauty company cut 25% of its global workforce, aiming to reduce redundancies and move some of its UK operations to Spain.

The acquisition by FemTec offered Birchbox the opportunity to grow with new capital. Birchbox founder Katia Beauchamp told Retail Dive at the time: "I think after a pandemic year full of change and uncertainty, we are truly excited that FemTec not only has a grand vision, but will be a well-funded one."

Despite the acquisition by a health company, Beauchamp said Birchbox had "absolutely no intention of leaving the beauty space." After the acquisition, Beauchamp became a strategic advisor, but is no longer listed in that role, and it is unclear when she left. As of August 2022, according to her LinkedIn profile, Beauchamp had become CEO of Victoria Beckham Beauty.

However, Birchbox's problems grew after the acquisition. In its most recent Instagram post, published on November 7, the company told its more than 520,000 followers that it was facing unprecedented setbacks and was seeking viable solutions. Around the same time, according to Women's Wear Daily, FemTec Health was reportedly considering bankruptcy. The publication, citing a letter to creditors, said FemTec offered creditors the option of receiving FemTec shares instead of payment.

As of March 2, comments on its Instagram posts from the past few months show customers still waiting for subscription boxes they paid for and unable to use accumulated points to purchase products. Of the nearly 300 complaints the company received at the Better Business Bureau, most were filed within the past 12 months. One customer wrote in a January 30 complaint: "I have $153 in credit with this company to redeem for subscription boxes. I keep trying to purchase products but keep getting 'encountering difficulties, please try again later' prompts." The customer updated the complaint last week, stating the website appears to be down.

The founding of FemTec

Parent company FemTec Health launched in October 2021 and, according to a company press release, has raised over $38 million. Investors include Longmont Capital, Ithaca LifeSciences, Unilever Ventures, Shiseido, and others. In addition to Birchbox, the health group has acquired several other companies, including Mira Beauty, Ava Women, and Liquid Grids. FemTec Health also launched a DTC health product subscription box service called Awesome Woman in February 2022; that service's website is still operational, but it has not posted on Instagram since September.

Kimon Angelides, founder, executive chairman, and CEO of FemTec Health, has also founded several other companies. Angelides founded Livongo, which was acquired by Teladoc in 2020 for $18.5 billion. Teladoc recorded a $6.6 billion impairment charge last April due to that difficult merger. According to the FemTec website, Angelides holds a PhD and also founded Vivante Health and Diabetes America.

Although some customers and suppliers have been waiting for a response from Birchbox since last year, FemTec has a corporate website in Greece with a copyright date of 2023.