Hello Bello, a diaper and baby products corporation founded by actors Kristen Bell and Dax Shepard, has filed for Chapter 11 bankruptcy protection, citing higher shipping costs, increased purchase prices and delayed shipment of raw materials needed to make the company’s products.
In the voluntary bankruptcy petition, Hello Bello listed estimated assets and liabilities of at least $100 million. The petition indicated that Hello Bello has at least 200 creditors and included a list of the 30 largest unsecured claims. The largest is from Irving Consumer Products, a tissue manufacturer claiming to be owed more than $22 million. Hello Bello is disputing the claim.
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According to the LA Times, the bankruptcy filing protects Hello Bello from creditors while it evaluates repayment options.
On the same day as the petition date, Hello Bello announced it had agreed in principle to be acquired by Hildred Capital Management, a healthcare-focused private equity firm. The deal is valued at approximately $65 million.
Erica Buxton, the CEO of Unconditional Love Inc., the company that does business as Hello Bello, stated, “Given macroeconomic trends, we believe this is the best path forward.”
Bell and Shepard, a married couple, founded the company in 2019, achieving 130,000 subscription customers and about $200 million in annual net sales by 2021. However, according to Buxton, the rise of global shipping costs and inflation outpaced the company’s ability to maintain its growth at steady margins.
Hello Bello initially sold its eco-friendly products exclusively at Walmart and direct-to-consumer via its website. In its first two years, the company made all its products via third-party co-manufacturers but began manufacturing its own diapers once it opened a Texas facility in 2021. Currently, Hello Bello makes and sells products through plants in Mexico, Canada, China and the U.S.
Hello Bello employs about 334 full-time workers in the U.S. and stated that it filed motions with the bankruptcy court that would allow the continued payment of employee wages and benefits.