Category: Business

Paula Dorf #Cosmetics files for Chapter 11 bankruptcy

Cold Cream 'n' Roses
Given the current depressed economic environment, I am amazed by the number of new cosmetics launches. Not all brands have been so lucky: recently Paula Dorf Cosmetics filed for Chapter 11 bankruptcy.

Paula Dorf

Paula Dorf Cosmetics has been a victim of the downturn in sales of prestige cosmetics, but there’s more. Crain’s provides some key points for Paula Dorf Cosmetics’ bankruptcy filing:

  • The company has assets of $1.5 million, but its liabilities are more than $3.9 million.
  • The company is in debt to 50 creditors, including Macy’s, HSN, and a cosmetics manufacturer. Another article, which I can’t place, cites delays by suppliers since 2003.
  • In addition, the company has “too many” colors and shades, which take up valuable “real estate” in cosmetics departments.

Paula Dorf fans should know that filing for Chapter 11 doesn’t mean that Paula Dorf Cosmetics is going out of business. During a visit last month to Dillard’s at the St. Louis Galleria, I saw that Paula Dorf took up the real estate formerly taken up by Shalini Vadhera’s Global Goddess Beauty, which Dillard’s has discontinued throughout its stores (as verified by Shalini herself).

The longest corporate legal battle

Cold Cream 'n' Roses1 Comment

… or so it seems.

I am no fan of direct selling or multi-tier marketing (examples: Amway, Mary Kay). I don’t like the aggressive selling or recruitment of customers to be salespeople, with the benefits accruing to those above them. Moreover, I don’t like how many of these companies often conflate religion with selling a product.

Probably the most egregious example to conflate religion with selling products was the rumours spread by Amway distributors to tie Procter & Gamble to satanic worship because of P & G’s (former) use of a logo featuring a man in the moon and 13 stars. I suspect that the distributors thought that this would play well among conservative Christian customers. For more background, see Logo controversy on Wikipedia. I regarded this effort to be defamation of P & G.

Now Amway is challenging the decision that they pay P & G nearly $20 million in legal expenses:
Amway claims P&G Satanic damages to be improper