UPDATE ON SKINFOOD
No doubt some of you will have heard the rumours of problems circulating at iconic Korean Beauty brand Skinfood. This week, Skinfood filed for receivership in Korea.
Here’s everything you need to know about the Skinfood crisis and what this will mean for getting our hands on our Skinfood favs!
BACKGROUND TO THE CRISIS
Rumours have been circulating since earlier this year of trouble at Skinfood, with complaints by store franchisees that they were unable to secure merchandise for their stores from the brand’s Korean headquarters.
Some store owners apparently resorted to buying Skinfood products online in order to have product to resell in their own shops. This was the first real sign of trouble.
WHAT CAUSED THE CRISIS?
Skinfood was hit particularly hard during both the MERS and THAAD crises, the most recent of which saw reduced numbers of Chinese tourists visiting Korea and a boycott on buying Korean products in China.
China was one of Skinfood’s primary markets, and this hit the brand hard.
In addition, a reduction in Skinfood’s global sales has been apparent since at least 2014.
FILING FOR RECEIVERSHIP
While Skinfood staved off rumours of internal problems throughout this year, claiming that its lack of supplies was due to a shortage in the raw materials, the company last week filed for receivership.
The official line is that Skinfood is having “temporary difficulties due to excessive debt.”
As a result, Skinfood has pulled out of retail chains like E-Mart in Korea (where the cost of renting a space in the store is high) and is closing its offline stores throughout Korea as well.
THE VIBE IN SEOUL
Over the last week, we’ve noticed that the shelves of many Skinfood stores have been looking increasingly bare.
Today, we saw stores having a 1+1 sale (buy one, get one free sale). Most of the products were gone from the shelves.
THE BAD NEWS?
For the time being, it seems unlikely that Skinfood will continue to manufacture products. It will first need to clear the debts it owes to its suppliers.
THE GOOD NEWS?
At this stage, the likelihood of Skinfood disappearing completely seems unlikely. The court-led receivership will aim to restructure the company so that it is able to repay its creditors.
Although the brand will likely undergo significant reductions (which could include a consolidation of its product line), for the time being, it seems Skinfood will focus on its online stores instead of brick and mortar, to try and stem the flow of its debts.
Skinfood in Korea has filed for receivership, meaning the company is unable to pay its debts.
While early signs are good that the store may continue to exist in some form (likely online), expect delays in securing supply of your favourite Skinfood products for the time being.
STYLE STORY – Your Style, Your Story