BECCA Cosmetics folds brand after 20 years amidst pandemic headwinds

Global cosmetic brand BECCA Cosmetics is folding its operations. In an open letter to its consumers, BECCA Cosmetics said an accumulation of challenges, together with the global impact of COVID-19, has been more than its business can withstand. Thus, it has decided to close down the BECCA brand by the end of September 2021.

"For 20 years – from Perth to New York and across the globe – we’ve built incredible connections with this amazing community, from our consumers to the makeup artist community, our wonderful network of influencers, to our amazing brand collaborators and brand ambassadors from yesterday and today," the announcement said. It add that the brand has done meaningful work together supporting mental wellness with the JED foundation and Mental Health Mates, as well as its upcoming The Trevor Project in June. MARKETING-INTERACTIVE has reached out about the impact of its closure on Southeast Asia. 

BECCA Cosmetics was acquired by the Estée Lauder companies in November 2016, as the brand saw "exceptional growth" over the previous years. Launched in 2001, Becca Cosmetics produces a curated product line that includes primers, concealers, foundations, blushes and highlighters. One aspect where the brand stood out in the industry, according to  Estée Lauder then, is that most of its foundations are available in up to twenty shades, with half designed for medium to deep tones and the other half designed for light to medium tones. This makes Becca a "highly coveted" brand for women of all ages and ethnicities, it added. 

According to its 2020 financial report that ended in June, Estée Lauder reported a decrease in its makeup operating income. It recorded a loss of US$1.4 million in 2020 as compared to 2019 when its income was US$438 million. This, according to the company, was driven by lower results from Too Faced, MAC and BECCA, combined, of approximately US$1,527 million. The decrease in operating income from these brands also reflect the decrease in net sales due to the general decline in prestige makeup and ongoing competitive activity in North America, as well as the challenging environment as of COVID-19.

BECCA Cosmetics is not the first makeup brand to have been negatively affected by the COVID-19 pandemic. Last June, NYX Cosmetics, which is a subsidiary of L'Oréal, exited the Malaysia market. The brand said in a Facebook post back then that it is permanently closing its stores in Suria KLCC, Sunway Pyramid and Mid Valley Megamall by the end of June, and its outlets in IOI City Mall Putrajaya, Fahrenheit 88 and Genting by the end of July. It has also pulled out of its eCommerce platforms Lazada, Shopee and Hermo in September. Besides the Malaysian market, NYX also exited the Indonesia market, closing its online stores permanently across six platforms: Shopee, Lazada, Tokopedia, Sociolla, JD.id, and Blibli.com.

Meanwhile, other companies have also been impacted by the pandemic. In January, Singapore-based fintech company GoBear also ceased operations across all its markets, attributing the decision to the challenging operating environment COVID-19 has created for the company. This caused the platform to be unable to raise more funds to continue operations "despite its best efforts". In Indonesia, Airy Nest Indonesia, a company that manages hospitality brand Airy Rooms, ceased its operations due to the volatile nature of the COVID-19. Similarly, Malaysian hotel Four Points by Sheraton Sandakan in Sabah closed down due to the economic downturn caused by COVID-19, which saw a lack of demand for products and services in the hospitality sector. 

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