Hello Bello, the baby products company founded by actress Kristen Bell and actor Dax Shepard, filed for bankruptcy after struggling to overcome high shipping and production costs.
The Los Angeles-based company, which is backed by private equity firm VMG Partners, listed at least $100 million in assets and liabilities in Monday’s bankruptcy filing. The filing protects the company from creditors while it attempts to sell itself out of bankruptcy.
High material and shipping costs hurt the company in recent years and was a major factor in its eventual bankruptcy, court documents show. Hello Bello tried to control those costs by building its own diaper factory in Texas, but the move further worsened its financial situation and it didn’t generate cost savings quickly enough to turn around the business.
“Given macroeconomic trends such as inflation and increasing shipping costs, we believe this course of action is the best way to ensure Hello Bello continues to bring the highest quality, most environmentally friendly products to families at affordable prices,” said Erica Buxton. the company’s CEO said in a statement.
Private equity firm Hildred Capital Management has offered to buy the company out of bankruptcy, the statement said. Court documents show the proposal is worth about $65 million, setting the stage for further offers.
Bell and Shepard, who are married, launched the brand in 2019 and struck a deal to sell the products exclusively at Walmart Inc., according to statements at the time. Hello Bello, like other consumer products companies such as Bed Bath & Beyond, has struggled this year as inflation and high interest rate pressures persist.
According to court documents, the brand’s largest creditor is a supplier of toilet paper products and may be owed about $22 million.
Svlook
