The retailer plans to close 23 stores shortly due to difficulties in paying rent.
The U.S. division of L’Occitane, a chain of stores selling cosmetics and health and beauty products, has officially filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
The company was yet another retailer facing financial difficulties amid the pandemic, primarily because of declining sales and difficulty paying its landlord debt. The chain is reportedly more than $15 million in rent arrears. Bankruptcy proceedings may help it stay afloat by reducing the number of physical stores and restructuring its debt.
L’Occitane announced plans to close 23 of its stores in the U.S., mostly in the most unprofitable locations. A total of 166 of the chain’s stores are currently operating in the country. Most L’Occitane boutiques are located in major shopping malls.
Although beauty products remained one of the most resilient categories during the pandemic, many retailers in this area, including L’Occitane, are still experiencing significant difficulties. Growth in beauty product sales was seen online. At the same time, brands that relied on physical stores, including luxury boutiques in malls, faced falling customer traffic and difficulty renegotiating lease terms.
Photo credit: depositphotos.com.
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