Inflation has been forcing consumers to make hard choices.
With 25% of American households living paycheck to paycheck in 2024, per Bank of America data, consumers are cutting back on discretionary spending to make room for essentials like shelter, food and transportation.
Although many people prioritize beauty and aesthetic treatments and products, spending there has fallen sharply. Morning Consult found that the share of shoppers buying four or more beauty and personal-care items per month fell across 2024. Its data also showed that consumers were leaning more toward budget beauty brands.
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Some consumers are still prioritizing aesthetics. Americans spend an average of $897 per year on their appearance, reports Chicago’s Advanced Dermatology, with the typical consumer being willing to spend $780 a year on cosmetic procedures.
Related: Famous gunmaker files Chapter 11 bankruptcy
But companies across a range of industries are feeling the sting as consumer patterns shift. And one specialty beauty company is filing for bankruptcy in hopes of reorganizing and continuing in business.Â
A popular beauty company has filed Chapter 11 bankruptcy.
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Beauty industry isn’t immune to tough economic times
The beauty industry has faced a number of challenges in recent years. Growing competition and the emergence of independent product makers have strained major players in the field.
The tech side of beauty has also seen its share of struggles. Regulatory scrutiny has put more pressure on tech-beauty companies and product manufacturers alike.
Related: Distressed iconic food brand files for Chapter 11 bankruptcy
The introduction of AI has also been a mixed bag. AI-enabled tools make it easier for aesthetics providers to offer more personalized customer care. Applications allow customers to see the effects of aesthetic treatments before committing to them.
But there’s a cost to implementing technology that some beauty companies might be struggling to absorb. And at a time when consumers may be favoring lower-cost aesthetic solutions instead of treatments that require booking appointments, tech-beauty companies are apt to run into trouble.
Cutera files for Chapter 11 bankruptcy
Cutera, (CUTR)  the famed developer of laser and light aesthetic treatments, filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of Texas.Â
The aim is to enable the Brisbane, Calif., company to restructure its debt, strengthen the balance sheet, and continue developing the aesthetic technologies it’s known for.
Cutera is entering bankruptcy by filing a prepackaged case with the support of its existing lenders, representing some 74% of the company’s notes.
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As part of the proceedings, Cutera aims to reduce its debt by $400 million and raise $65 million of new funds from its pool of existing lenders. The company will operate as usual throughout its bankruptcy proceedings.
Unlike some Chapter 11 bankruptcies, Cutera’s restructuring is expected to move quickly, wrapping up within 60 days. That’s because the company negotiated its restructuring plan ahead of its Chapter 11 filing.
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The company has asked the court to allow it to make timely payments to vendors for goods and services delivered before and after the filing.Â
Upon emerging from bankruptcy, Cutera will be a private company. The company’s entities outside the U.S. are not included in its Chapter 11 proceedings.
“Cutera has established a legacy of premium engineering, innovation, and service, and we are constantly evolving to better meet the needs of our customers and their patients,” Chief Executive Taylor Harris said in a statement.Â
“Today we are taking an important step that will enable us to continue to execute on our growth initiatives and pursue our mission with a much stronger capital structure to support us.”
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