On Thursday, Jan 12, the parent company to Morphe (more-fee), Forma Brands, filed for chapter 11 bankruptcy after announcing that they would be closing down all Morphe stores in the U.S. Filing for chapter 11 bankruptcy can allow businesses to rebrand and reorganize after going bankrupt.
From 2016 to 2019, Morphe was one of the biggest selling brands in the makeup industry, partnering with influencers like James Charles, Jaclyn Hill, Jeffree Star, Manny MUA, Laura Lee and many more. Influencers would review Morphe products and give viewers discount codes so that their audience would purchase something, thus supporting both the creator and the company.
The way the discount codes worked was that the influencers would make commissions from their codes, the buyer would get a 10-15% discount, and the company would get its money. Seeing how well the discounts codes worked for Morphe, they ended up doing makeup collaborations with these influencers. People like James Charles, Jeffree Star, and Jaclyn Hill would come out with their own makeup lines which would typically include things like eyeshadow palettes.
One of the most successful business endeavors for Morphe was the Jaclyn Hill palette which launched on June 21, 2017 retailing at $38. According to Jaclyn Hill on Insider, it broke selling records and became the best selling item in the beauty industry as the palette sold out hours after it launched. Hill also stated many times that the palette included her own formula which was different from Morphe’s standard formula. Following the release, the palette became one of the most well received palettes and the formula became loved by all.
Seeing the massive success the first palette was, Morphe and Hill announced the Vault Collection set to release on June 26th, 2018. The palettes were expected to be the exact same formula as the last one, which Hill herself claimed, but with different shades. People started to have problems with the palettes when they noticed that the formula was different and harder to work with. Influencers who got the palette in PR claimed that the palette was extremely patchy and hard to blend. Following all the negative reviews, on June 21, 2018, Morphe announced that they were pulling the palette and delayed the launch until August 14, 2018.
According to Insider, in 2017, Elevate Brandpartners invested in Morphe because they wanted to expand stores nationally and internationally.
Fast forward to 2020, James Charles got into controversy with fellow Youtuber and makeup influencer Tati Westbrook. Tati Westbrook posted the infamous video titled “Bye Sister” which was considered an expose on James Charles. Later on in the year, Tati stated that Youtubers Shane Dawson and Jeffree Star gaslit and manipulated her into making the video. Because of the accusations, Jeffree Star ended up getting dropped by Morphe on July 10, 2020.
James also got a lot of hate as younger men started to come out and say that James Charles was texting them and turning conversations sexual without asking for age. James Charles posted 2 apologies with one of them being deleted. As a result of all the controversy, Morphe cut ties with James April 17, 2021. James was one of the biggest money makers for Morphe as he was a very popular creator and so dropping James meant that Morphe was bound to lose a lot of money.
Shelby Wild, founder of Playa Haircare, announced that she was suing Forma for 15 million after they failed to support her brand. According to Business of Fashion, Forma estimated that Playa would make 50 million in the span of 5 years but in 2021, they only made 1.9 million which was less than half of what Forma estimated. Forma shifted their efforts trying to revive Morphe but to no avail as all around the U.S, Morphe was closing stores without notice and were not letting employees know ahead of time. Multiple ex Morphe employees on TikTok claimed that they had as little as one day’s notice of their store closing which was very problematic as they had no notice of store closings and were left without jobs. Morphe tried to rebrand as Morphe 2 with influencers Charli and Dixie D’Amelio but weren’t able to see the same success they saw previously.