Saturday, August 15, 2009

Paula Dorf #Cosmetics files for Chapter 11 bankruptcy

Given the current depressed economic environment, I am amazed by the number of new cosmetics launches. Not all brands have been so lucky: recently Paula Dorf Cosmetics filed for Chapter 11 bankruptcy.
Paula Dorf
Paula Dorf Cosmetics has been a victim of the downturn in sales of prestige cosmetics, but there's more. Crain's provides some key points for Paula Dorf Cosmetics' bankruptcy filing:

  • The company has assets of $1.5 million, but its liabilities are more than $3.9 million.
  • The company is in debt to 50 creditors, including Macy’s, HSN, and a cosmetics manufacturer. Another article, which I can't place, cites delays by suppliers since 2003.
  • In addition, the company has "too many" colors and shades, which take up valuable "real estate" in cosmetics departments.

Paula Dorf fans should know that filing for Chapter 11 doesn't mean that Paula Dorf Cosmetics is going out of business. During a visit last month to Dillard's at the St. Louis Galleria, I saw that Paula Dorf took up the real estate formerly taken up by Shalini Vadhera's Global Goddess Beauty, which Dillard's has discontinued throughout its stores (as verified by Shalini herself).

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