“Although the company is currently at stake in securing liquidity due to excessive debt, considering Skinfood’s unique branding and product competitiveness we believe the court restructuring and normalisation of the business will benefit everyone, including the creditors,” the company said in a statement.
As of October 15, Skinfood’s official Korean website was inaccessible.
Considered as part of the first-wave of the K-beauty trend, Skinfood burst onto the beauty scene in 2014 with its unique concept of using the nutritional values of food to create beauty products.
With help from the K-wave and its quirky food-like packaging, the brand developed a cult-following and expanded beyond Korea to Malaysia, Singapore, Hong Kong, the UK and the US.
According to the Korean Herald, Skinfood was once the third most popular Korean cosmetics brand in terms of sales, behind Missha and The Face Shop, recording 200bn won ($176 million) of annual sales in five years.
However, Skinfood had been bombarded with speculations about its impending closure. In July, reports circulated that its popular products, like Choco Eyebrow Powder Cake and Peach Cotton Pore Sun Pact were out of stock for months.
The Investor reported than a Skinfood franchisee claimed that the company had stopped supplying stores for more than half a year, leading to empty shelves and quiet outlets.
While the company fervently denied the claims, sources stepped up to claim Skinfood had been bleeding money since 2014 and would soon shutter its stores.
Just last month, The Investor reported about the ailing company again, stating that its CEO, Cho Yoon-ho, was selling his majority stake.
Market experts have stated that Skinfood suffering business was due to increasing competition from other Korean cosmetic brands like Innisfree and Missha, which offer similar products, often at discounted prices.
Unlike other Korean beauty brands and local drugstores like Olive Young that have sales often, Skinfood stuck to a no-sales policy as part of its strategy.
Skinfood was also said to have suffered from the Middle East Respiratory Syndrome (MERS) outbreak in 2015 and the diplomatic row between Seoul and Beijing over the THAAD missile defence system, which led to a sharp decline in tourism.
The brand took another hit in March when unsafe levels of the heavy metal antimony were found in one of its products, causing it to be banned by the South Korean government.