Baby products company Hello Bello, founded by actress Kristen Bell and actor Dax Shepard, filed for bankruptcy after it struggled to overcome high shipping and production costs.
The Los Angeles-based company, backed by private equity firm VMG Partners, listed assets and liabilities of at least $100 million each in its bankruptcy petition on Monday. The filing protects the company from creditors while it tries to sell itself out of bankruptcy.
High material and shipping costs have hurt the company in recent years and were a major factor in its ultimate bankruptcy, according to court papers. Hello Bello attempted to keep those costs in check by building its own diaper factory in Texas, but the maneuver further strained its finances and didn’t yield cost savings fast enough to turn the business around.
“Given macroeconomic trends, including inflation and increased shipping costs, we believe that this course of action is the best path forward to ensure that Hello Bello continues to bring families the highest quality and most environmentally friendly products at affordable prices,” Erica Buxton, the company’s chief executive officer, said in a statement.
Private equity firm Hildred Capital Management has offered to buy the company out of bankruptcy, according to the statement. The proposal, valued at about $65 million, sets the floor for further offers, court papers show.
In 2019, Bell and Shepard, who are married, launched the brand alongside a deal to sell the products exclusively at Walmart Inc., according to a statement at the time. Hello Bello joins other consumer companies like Bed Bath & Beyond that have buckled this year as the pressure of inflation and high interest rates persists.
The brand’s largest creditor is a tissue products supplier that may be owed about $22 million, according to court papers.