The beauty industry has faced economic issues that the rest of the retail sector has faced over the last two years, which led to business closures and bankruptcy filings.Various beauty sectors, such as hair salons, spas, cosmetics, and skin and hair products, have battled rising costs of labor and products driven by inflation, rising interest rates on their debts, increased tariff costs, and fierce competition that have caused financial distress.Many companies have chosen either out-of-court or in-court restructurings to try to solve their problems, such as luxury hair-styling chain Capelli Salon, which filed for Chapter 11 bankruptcy protection to restructure its debts.
The beauty sector, including hair salons, spas, and cosmetics retailers, is facing economic issues.Shutterstock
Capelli Salon files Chapter 11 bankruptcyThe Dallas-based salon chain’s parent, Capelli Partners LLC, filed its Subchapter V petition in the U.S. Bankruptcy Court for the Northern District of Texas in Fort Worth on May 5, listing $1 million to $10 million in assets and liabilities, according to PacerMonitor.The debtor continues operating as normal and has not indicated any plans to close locations.The high-end hair salon chain, which opened its first location in Dallas about 14 years ago, did not state a specific reason for filing for bankruptcy.Capelli Salon specializes in high-quality hair extension services, hair loss solutions, premium hair colour services, premium hair cut services, Balayage Hair Colouring Service, and Keratin Complex Smoothing Services.Capelli offers customer dealsThe salon chain offers a variety of discounts for all customers.Discounts include buy one, get one free on beauty and health hair care procedures, a hair extension special starting at $600 (regularly $800), and Keratin Treatment Special at $280 (regularly $350).Capelli currently operates two locations in Dallas at 19177 Preston Road, Suite 165, and 11909 Preston Road, Suite 1415, as well as salons in Austin and Frisco, Texas.Maribou Salon files Chapter 7 to liquidateAnother popular hair salon chain, Maribou Salon, which operated three locations in Folsom, Calif., and one in Roseville, Calif., filed for Chapter 7 bankruptcy liquidation on Jan. 15, 2026, after closing all of its stores, the Sacramento Business Journal reported.The salon chain, which opened in 2006, closed its locations in Historic Folsom and Palladio at Broadstone in Folsom in December 2025, after closing its shops on Blue Ravine Road in Folsom and in Roseville, citing economic struggles, according to Folsom Times.Other beauty retailers have filed for bankruptcy protection in the last year as well, including several individual spas across the country and some major cosmetics companies.Beauty companies seek restructuringBeauty technology company Cutera, a leading provider of aesthetic and dermatology solutions, on March 5, 2025, filed a prepackaged Chapter 11 bankruptcy seeking to reduce its debt by $400 million.Cutera successfully reorganized, completed its financial restructuring, and emerged from bankruptcy on May 1, 2025, reducing its debt by 90%.Cutera’s fast bankruptcy case followed giant cosmetics retailer Avon Products’ bankruptcy case, which was filed in August 2024. Avon faced hundreds of lawsuits related to asbestos exposure and $1.3 billion in funded debt, but was able to sell its assets to Natura & Co. Holding SA in December 2024.Avon’s Chapter 11 plan was confirmed on Sept. 24, 2025, and was effective on Oct. 7, 2025. Avon was represented by the law firm Weil.Related: Troubled winery files rare Chapter 12 bankruptcy to settle debt