AS Beauty pulls the plug on Cover FX and Mally Beauty due to costs and market shifts

AS Beauty is closing makeup brands CoverFX and Mally Beauty. The legacy makeup brands say rising industry costs and changes, such as tariffs and the transforming marketplace, contributed to the shutdowns. 

Both brands confirmed the closures on their respective Instagram accounts. Cover FX wrote that the beauty industry is facing “new challenges, from tariffs to a shifting global market,” leading to the company “winding down the business.” 

Mally Beauty echoed the same culprits, announcing: “As the industry faces new challenges — from tariffs to market shifts — we’ve made the heartfelt decision to wind down the Mally Beauty business.”

The brand shutters seem to be a response to escalating competition, rising costs, faster innovation cycles, and higher consumer expectations that are reshaping the beauty industry. The rapidly evolving landscape is creating conditions where even well-known brands like CoverFX can become unsustainable within a modern portfolio.

AS Beauty has reportedly said that the closures of Cover FX and Mally Beauty allow it to concentrate its resources and investments on brands demonstrating sustained growth and long-term potential. The company says it plans to focus on successes rather than forcing outcomes that no longer align with its strategy. It also hints at exploring future growth opportunities and potential acquisitions aligned with its long-term vision.

Keeping up with the times

The makeup brands’ products will remain available until their stock runs out. Mally Beauty items will remain available on Amazon and QVC, and CoverFX will continue selling direct-to-consumer and on Amazon.

AS Beauty gained Mally Beauty from Beauty Visions, a private investment firm, in 2021, after Mallygirl, the forerunner to Mally Beauty, entered involuntary bankruptcy in 2015. Mally Beauty is positioned as professional-level makeup for everyday shoppers.Cover FX announces its closure after years in the beauty spotlight. 

AS Beauty acquired Cover FX from private equity firm L Catterton Partners in 2022. Cover FX gained popularity by prioritizing inclusive shade ranges. The move came years before Fenty Beauty’s 40-shade foundation debut caused the beauty industry to confront diversity in foundations.

The brand’s gross sales slid from US$65 million in 2018 to US$20 million at the beginning of 2022, according to Women’s Wear Daily. The magazine also reported that AS Beauty conducted an overhaul that led to a prompt spike in sales, but was met with customer criticism that it was shrinking its staple diverse shade ranges.

Cover FX’s shutdown announcement was met with some solemn social media posts and comments both on the brand’s Instagram announcement and beyond. 

Owner of Makeup Art and Design Enterprises, Kevin James Bennett, wrote on LinkedIn: “It’s the end of an era… Cover FX was a staple in my professional makeup kit. I remember working with the founding team decades ago — what an amazing group of cosmetic innovators and visionaries.”

“But I know it was difficult to recover after the thugs at Sephora got involved, forced the brand to make unpopular changes, which ended up being the beginning of the end. You’ll be missed.”

Cover FX was carried by Sephora for many years throughout the 2010s, as part of Sephora’s core lineup of complexion and makeup brands. By 2021, Cover FX was no longer actively stocked at Sephora, and the brand shifted focus toward direct-to-consumer, Amazon, and Ulta channels. In 2022, it left Ulta Beauty.

AS Beauty also owns beauty brands Laura Geller, Bliss, and Julep Beauty. 

Big beauty business 

A similar-sounding story took place last year. Unilever closed its skin care brand REN, citing “a combination of internal factors, compounded by market challenges in recent years,” as the reason for the business closure. The FMCG giant said the brand could not sustain its success in the long term. Mally Beauty confirms it is winding down operations. 

Recently, Saks Global filed for bankruptcy, resulting in it owing major beauty companies millions. Chanel, Kering, Estée Lauder Companies (ELC), Beiersdorf, Puig, LVMH, and Europerfumes are named in the voluntary Chapter 11 bankruptcy. The retailer’s financial troubles are another reflection of beauty shoppers’ changing behavior and of brick-and-mortar stores’ failure to keep up with modernity. 

There has been an influx of rumors circulating in the beauty industry relating to potential sales and acquisitions. Earlier this month, ELC was reported to be considering selling Smashbox, Too Faced, and Dr. Jart+ as a package deal. Additionally, Olaplex was said to have received a takeover offer from German consumer goods company Henkel. 

L’Occitane Group is also reportedly considering launching an initial public offering in the US, less than two years after going private. 

In solidified business moves, Suave Brands Company and Elida Beauty merged to create a new beauty giant, Evermark.