L’Occitane Files for Bankruptcy
News broke today that L�Occitane has filed for bankruptcy but don’t panic quite yet as the brand is still thriving in Internationally and this does not extend to Elemis. I hate to say it I’ve been sitting here waiting to see who would hit the chapter 11 button first. 2020 was a rough year and a lot of brands struggled to stay afloat. Beauty brands in particular are guilty of setting themselves up for failure with an endless round of releases that go on sale within weeks of launching. The overly saturated market makes for a hard sell when everyone is sitting around waiting for that next big sale. There is no value in limited edition releases anymore.
L�Occitane bankruptcy isn’t about poor sales though. Their problem is they are having issues maintaining the rent on their boutiques. This understandable as many L’Occitane Boutiques are in desirable locations especially here in Manhattan and with quarantine and lock down their store locations sales are suffering. Apparently L’Occitane has made efforts to address unmanageable store lease terms without success. By filing for Chapter 11 they hope right their issues with brick-and-mortar locations.
It’s hard to say if this will improve L’Occitane store front presence. At some point it may be a brand we see online only but for now this is their first step at righting their issues with physical locations.
“Today’s action is a pivotal step forward in achieving the full potential of L’Occitane’s U.S. business,” said Yann Tanini, managing director of L’Occitane North America. “Over the past year, we have moved aggressively to address Covid-related challenges head on, developing innovative new ways to connect with our community and continue to deliver the extraordinary L’Occitane beauty experience that our customers know and love, all while accelerating the essential transformation of our store footprint already underway. We look forward to working collaboratively with our landlords to achieve partnerships that make economic sense in this current retail environment and best position our marquee brand’s boutique offering for years to come.”
“Just like in L’Occitane’s other markets around the world, we look forward to continuing to serve our loyal clients here in the U.S. in our boutiques, online, and through our amazing team of passionate beauty advisors. As always, L’Occitane is focused on creating a delightful and personalized customer experience, and we will continue to develop innovative products with unique benefits. Our unwavering commitment to sustainability and ambition to make a positive impact in the world are stronger than ever. We appreciate the continued support of our employees, community, and partners, and we are excited about the bright future of our U.S. business.”
Regardless, of the filing, L’Occitane group which also includes brands like Elemis claims they have ample liquidity to support the brand and fulfill obligations to customers, supplies, and employees.
They actually have 166 locations within the US and plan on closing 23 of them which isn’t a lot at all considering the current pandemic. Last count they had 3,000 retail outlets in 90 countries.
So, yeah, no need to panic just yet. L’Occitane seems like they are in good shape for the future and the filing may fix some wrongs they are currently having.
I’ll keep you updated on the filing.
Which brands do you think will be having issues with sustainability this year?
