With the global events industry at a halt, the beauty festival company is still seeking new investment.
With the coronavirus forcing event cancellations and a new round of fundraising yet to be locked in, Beautycon seems to be under increasing pressure.
The production company alleges that it made several attempts between August and January to negotiate informally with Beautycon. Within that time, the claim states, Beautycon went from making “repeated representations that it could and would pay” to negotiating for payment extensions due to “alleged financial circumstances.”
Adding to speculation over the company’s financial state, remaining staff at Beautycon experienced delays in payroll last month, yet were said to have been asked to continue working. Requests by employees to be laid off or furloughed in light of missed paychecks were denied, sources said.“All of our employees have been fully compensated,” said Michael Rafter, chief financial officer for Beautycon. “One payroll in April was briefly delayed but ultimately paid in full.
Beautycon is said to have told employees that a new funding deal is close to completion but does not know when that funding will come through. While the entire live events industry — along with most others, including the beauty sector — has certainly been thrust into a state of uncertainty, WWD’s initial report from December indicates that Beautycon’s troubles may have started before the economic shutdown, with sources indicating the company was having a tough time obtaining new funding due to concerns over its potential for profitability.
Beautycon confirmed that in February it departed the Beautycon Pop space at 333 La Cienega Boulevard, where it had moved its corporate headquarters once Pop shut down. The company is said to be operating out of two small rooms at a WeWork in Los Angeles.
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