Beauty

L’Occitane Files for Bankruptcy in an Effort To Reduce Store Footprint

L’Occitane, the beloved French brand known for their body, skin and fragrance products, is officially filing for Chapter 11 bankruptcy—also known as “reorganization” bankruptcy—due to COVID-related business interference. The reasoning behind the company’s shocking announcement: “Its business continues to be impacted by disproportionately high store rent obligations that are no longer tenable,” says a release.

Especially since the start of COVID, digitally-motivated customers are driving the beauty industry. For this reason alone, companies like L’Occitane are forced to re-evaluate the necessity of their stores in order to strategically satisfy these consumers.

“The Company determined that a Chapter 11 process was the necessary path to right-size its brick-and-mortar presence following repeated endeavors to engage with its landlords to address unmanageable store lease terms.” Their next step? Implementing what’s called a “store footprint optimization plan,” which will involve the removal of unprofitable store locations.

Thankfully, according to the release, L’Occitane has had “ample liquidity to support ongoing operations across all channels and fulfill commitments to its valued employees, customers, and suppliers in the ordinary course during the restructuring of its U.S. store lease portfolio.”

According to Yann Tanini, managing director of L’Occitane North America, “Today’s action is a pivotal step forward in achieving the full potential of L’Occitane’s U.S. business,” she says in the release. “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.”

 

The post L’Occitane Files for Bankruptcy in an Effort To Reduce Store Footprint appeared first on NewBeauty.

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