The cruelty-free beauty and lifestyle subscription box service Kinder Beauty has been dissolved, according to an email to vendors obtained by Beauty Independent.
“Kinder Beauty has never been profitable,” wrote Andrew Bernstein, co-founder and CEO of Kinder Beauty, in the email dated Jan. 5. “At the end of November, we learned that our long-time primary funding source was unexpectedly backing out of the relationship. Since then, we’ve been unable to find the financing necessary to keep the business operating. On top of that, our rising liabilities now far exceed our assets, and we’re not generating nearly enough revenue to get ahead of the situation.”
He added, “All we’ve ever aspired to do at Kinder Beauty was to spread kindness into the world, support small businesses, and help bring joy into customers’ lives. While we haven’t missed the mark entirely, know that I will never be okay with this outcome and how it will impact small businesses and founders/entrepreneurs for whom I have an unbelievable amount of respect. I don’t take this lightly, and I am deeply sorry for the negative impact our failure as a business may have on your own business.”
The email states Kinder Beauty’s liquidation is “effective immediately.” After a search for a buyer that turned up empty late last year, customer orders were halted Christmas week. Products were subsequently pulled from Kinder Beauty’s website. Reddit users claim that emails and social media posts from the company stopped at roughly the same time. Bernstein declined to comment on Kinder Beauty’s business.
To avoid filing for Chapter 7 bankruptcy, the company is hoping to reach settlement agreements with vendors. Bernstein’s email discloses it owes $500,000 to unsecured creditors, but the pool of funds available to it is between $55,000 and $90,000. “The amount of each settlement will likely be between $0.11 to $0.18 on the dollar,” he wrote.
Kinder Beauty’s largest secured creditor is its third-party logistics provider. It owes $400,000 to the provider, which has a lien on the company’s inventory, and $56,000 to Shopify Capital, its second-largest secured creditor. Its majority shareholder is its largest unsecured creditor. Per the email, the shareholder loaned the company $1.2 million over the last year and wishes to receive “certain intangible assets of the business” in lieu of a cash settlement. Labor Capital, Strivv and Cambridge Way Ventures, a venture capital firm with Canopy, Jolie, Glowbar and Pop Up Grocer in its portfolio, have invested in Kinder Beauty.
Kinder Beauty’s troubles were brewing well before the company started winding down. Launched by Bernstein along with actresses Daniella Monet and Evanna Lynch in 2019, the company sales surged 300% in its first year on the market as the pandemic sent people scurrying for goods outside of traditional brick-and-mortar venues. Sales flattened in 2021 with shoppers returning to stores, and global supply chain disruptions wreaked havoc on Kinder Beauty, too.
“For a business that curates products from other people, the supply chain impacted us more than a traditional retailer or one of our beauty brand partners,” Bernstein said in an interview with Beauty Independent in March last year. In the interview, he went on to reveal that Kinder Beauty’s gross margin tanked almost 50% since 2020 as it battled inflated costs. He said, “That is not a sustainable margin for any business to rely on unless you’re a mom-and-pop shop with no employees or overhead.”
To supplement its weakening monthly subscription box business, Kinder Beauty launched two business verticals in late 2022 and early 2023: an in-house skincare line featuring three vegan facial serums and a quarterly lifestyle box called KND that retailed for $64.95 and featured products curated around the idea of comfort and self-care. The initial KND box sold out within weeks of release.
Kinder Beauty’s regular monthly beauty boxes retailed for $24.99 and contained five full-size and mini products. Among the many brands that have participated in the boxes were 100% Pure, Andalou Naturals, Source Vital Apothecary, ShiKai, Dirty Lamb, Glamnetic, Earth Harbor and Sahara Rose. At the outset of 2023, Kinder Beauty had 12,000 monthly subscribers.
Despite attempts to diversify its business, Kinder Beauty continued to struggle throughout 2023. In the summer, Bernstein posted on LinkedIn that the company underwent a series of layoffs involving personnel in social media marketing and strategy, art direction, design and graphic design, photography, warehouse operations and finance. He didn’t specify the number of employees affected. Kinder Beauty marked down merchandise on its site by the fall and its holiday beauty event in December offered shoppers an additional 50% off all products.
Kinder Beauty’s closure isn’t happening in a vacuum. Beauty subscription box companies have been under strain as they contend with depressed sales and shifting consumer behavior. Birchbox, once the biggest beauty subscription player on the market, is now a shadow of its former self. It was acquired by Retention Brands in the spring of 2023 after its previous owner, Femtech Health, entered a bankruptcy alternative process called an assignment for the benefit of creditors. Once valued at $500 million, Birchbox sold to Femtech Health in 2021 for $45 million.
Meanwhile, The Hut Group closed Glossybox’s United States operations in July, and Ipsy parent company Beauty For All Industries co-founder Marcelo Camberos stepped down as CEO in January last year. The company shuttered a brand incubation arm. Other smaller subscription box players like Curlbox have closed.
