Birchbox Customers Are Frustrated — What Happened to the Company?

Birchbox is a beauty subscription company that led the way in helping customers sample new beauty products in order to find their favorites. According to the Liverpool Echo, the company has "gone bust," but why it failed remains in question. So, what happened to Birchbox?

The company was based in New York City and founded in 2010. Led by founders Katia Beauchamp and Hayley Barna, Birchbox allowed customers to sign up for a monthly subscription and receive new beauty products to sample. However, Birchbox hasn't done well compared to other beauty subscription boxes, it seems.

Hayley Barna and Katia Beauchamp, both Harvard Business School graduates, started Birchbox in 2010. The company raised $1.4 million in seed money that year, with initial investors including First Round and Accel Partners. A Series A round for $10.5 million followed in 2011, and a Series B funding round in 2014 worth $60 million, with Viking Global Investors leading that round.

The concept behind Birchbox was that customers would appreciate the chance to try out new beauty products curated for them. Samples each month would vary and could include perfume, makeup, skincare products, and more.

A Soldsie partnership began in 2014, which enabled Birchbox customers to purchase beauty items they'd liked from their subscription boxes directly through Instagram. The user would leave a comment on a photo of the item with the hashtag #birchboxcart.

In general, Birchbox hoped that it would make revenue primarily through customers who ended up buying a full-sized item such as hair care products, cosmetics, or perfume through its website. The company's Facebook page still reads, "When we started Birchbox, we set out to make the world of beauty better."

Birchbox has always primarily operated as an e-commerce business. However, there was at least one brick-and-mortar store, opened in Soho in New York City. Taking advantage of online shopping was a benefit, but the COVID-19 pandemic still damaged the company's revenue.

The company hasn't been very forthright with consumers about its status, as evidenced by tweets and other social media comments. In November 2022, the company posted to its Facebook page: “To our members: We know you’re frustrated. Birchbox is facing a host of unprecedented setbacks that are affecting all of you, our cherished members.”

That post is the most recent one on its Facebook page, so it looks like the page is mostly inactive now. Around the time of that posting, a number of customers aired frustrations over having not received boxes they'd paid for.

There are likely a number of factors that have caused Birchbox to, presumably, go completely out of business. Rumors that it was considering a Chapter 11 bankruptcy began swirling last fall as delivery of boxes halted.

Birchbox faced major challenges in recent years:

• January 2020: Birchbox cut 70 percent of its staff.
• October 2021: FemTec acquired Birchbox for $45 million, planning to shift its focus.
• November 2022: FemTec was reportedly considering bankruptcy.

According to Beautypackaging.com, FemTec sent a letter to its creditors advising them to consider opting into shares of FemTec. “We believe, in the best interests of Birchbox and the entire FMTC family of companies spanning the U.S. and Europe, a Chapter 11 or some equivalent structure may be necessary.”

Although the website appears inactivated, Liverpool Echo explains that Birchbox said, "We are no longer fulfilling orders or shipping subscription boxes." Plenty of customers are upset at not having been notified by the company of the liquidation and having to individually seek out refunds.