Hello Bello Files For Bankruptcy, Finds Buyer 🍼

Author

CPG WIRE
October 24, 2023

Welcome back to This Week in CPG, folks. Hope y’all had a good weekend and a productive Monday. Here’s what we’re getting into this morning:

  • Steve Madden buys brand 👠

  • SKIMS pushes into menswear 📈

  • Something new from Necessaire 👋

  • Travis Barker temporary tattoo collab 🆕

  • U.S. consumers spending a lot on coffee ☕️

Shout-out to Rivo for making retention and loyalty programs on Shopify so easy.

Hello Bello Has a New Owner 🍼

It must have been an eventful weekend at Hello Bello HQ. On Monday, the premium baby care brand founded by Kristen Bell and Dax Shepard, announced that a) it filed for bankruptcy protection and b) that Hildred Capital Management will acquire the brand.

Per The Information, the middle market private equity firm will pay $65M to acquire the brand out of bankruptcy. Hello Bello’s lenders seem fairly pleased with the deal as they’re providing debtor-in-possession financing to keep operations afloat until the transaction closes. Interestingly, Hello Bello is still accepting acquisition bids, so there is the possibility that another suitor comes along and cuts a larger check.

Founded in Los Angeles in 2019, Hello Bello began selling diapers, wipes, and a variety of personal care products like lotion and shampoo exclusively at Walmart. Later, Hello Bello expanded into vitamins, supplements, and even home care. They also expanded their retail presence to include CVS, Kroger, and Target.

According to Erica Buxton, the CEO of Hello Bello, “given macroeconomic trends, including inflation and increased shipping costs, we believe that this course of action is the best path forward to ensure that Hello Bello continues to bring families the highest quality and most environmentally friendly products at affordable prices.”

In addition to the factors mentioned above, it appears that Hello Bello simply had too many ancillary products and had too much inventory, which led to a cash crunch and existential crisis.

If the transaction does close, Hildred Capital Management stands a good chance of turning Hello Bello around. Despite the cash crunch and operational struggles, Hello Bello still generated an impressive $180M of revenue last year, and Hildred has the category experience and operational rigor to turn Hello Bello into a functioning business instead of a venture-backed cash incinerator.

One headwind that Hildred will encounter is that baby care has become considerably more competitive. Most of the other players — Freestyle, Pipette, Proudly, and The Honest Company — are also sustainable, clean label, and fairly affordable.

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Deals 💰

Mergers & Acquisitions 

  • Fashion and footwear company Steve Madden (Nasdaq: SHOO) acquired Almost Famous for $52M in cash. Almost Famous is an accessibly priced fashion label that retails at Kohl’s, Macy’s, and Walmart. Sales for fiscal 2023 were $163M. Business of Fashion

  • Anya Hindmarch has acquired control of the namesake luxury accessories brand that she launched in London in 1987. Hindmarch returned as CEO in 2019 and has grown revenue and reduced losses. The Industry

What’s New 🤩

Apparel, Cosmetics, and Wellness

  • SKIMS, the fast-growing shapewear brand that Kim Kardashian founded in 2019, is launching into the menswear category for the first time with SKIMS Mens. The new collection drops on 10/26 and features briefs, tanks, tees, and socks. Star athletes Neymar, Nick Bosa, and Shai Gilgeous-Alexander are promoting the collection 🔽 PR Newswire 

  • Luxury personal care brand Necessaire is launching a new product, The Hand Retinol, later today. The fragrance-free repair serum helps treat and prevent wrinkles. Love this company and their branding 🔽 Necessaire 

  • Travis Barker has partnered with temporary tattoo brand Inkbox on a limited-edition collection of designs. Each tattoo lasts one to two weeks. BIC acquired Inkbox in early 2022 after the brand posted FY sales of $27M the previous year. Happi 

  • Cabinet Health launched what they claim is the world’s first plastic-free, refillable prescription service. Cabinet Health Rx offers users more than 150 prescription drugs which are packaged in sleek glass jars. Refills are then shipped to users. Good-looking product 🔽 The Dieline

Food, Beverage, and Alcohol

  • Chamberlain Coffee teased their newest coffee blend on IG which will be caramel. Instagram

  • Based on recent trademark filings, global beverage alcohol firm BrewDog might be launching a brandy soon. Lately BrewDog has been prioritizing spirits over craft beer as they’ve launched gin, vodka, and rum brands. They also invested $8.8M into BrewDog Distilling Co. The Grocer

  • Banza is collaborating with Tabasco on a spicy, high-protein, and gluten-free frozen pizza that launches today. Very fun packaging. Shout-out to the great IndieCPG for discovering this 🔽 Banza

Data 🖥️

  • U.S. consumers spent nearly $110B on coffee and related goods in 2022. Additionally, the domestic coffee industry supports 2.2 million jobs and generates over $101.2B in wages. PR Newswire

  • According to Union OnPrem Insights, consumers are willing to spend more on celebrity spirits brands at bars and restaurants (73% more). Also celebrity brands accounted for 10% of sales at venues where Union collects data. The Spirits Business

Distribution News 🚚

  • Sports drink brand A-Game announced a distribution partnership with Polar Beverages for New England.

  • LesserEvil Snacks launched at over 8,000 Walgreens stores.