(Bloomberg) — Morph Makeup, a social media star-driven fast-growing company with a $2 billion valuation, has announced plans to close all of its stores in the United States.
On Thursday, the company listed about 20 locations on its website. Morphe’s parent company did not respond to a request for comment from Forma Brands. Morphe also sells through his own e-commerce site and his Ulta Beauty.
Partnerships with high-powered internet celebrities such as Jeffree Star and James Charles brought in over $400 million in revenue in 2019, according to a December 2021 company presentation confirmed by Bloomberg. However, after the star was accused of using racist language in 2020 and sexual misconduct allegations plagued Charles in 2021, Morph cut ties with them.
Forma, which generates about 80% of its revenue from Morphe, has been doing worse since then. Earnings fell short of internal plans by about 20% in 2021, according to documents. In the first 10 months of the year, revenue associated with another social media star, Charles, Starr and Jaclyn Hill, dropped 66% to $32 million.
The company’s descent from a beauty darling known for its affordable eyeshadow palettes and enthusiastic store openings once again demonstrates the dangers of gambling on social media buzz.
“It’s a dangerous model,” said cosmetic chemist Kelly Dobos, who works as an industry consultant. Influencers “always become less relevant.”
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