This Company Went Bust by Over-Relying on Influencer Collabs. Here’s How It Made a Comeback

To say the last few years have been difficult for Morphe is an understatement. Founded in 2008 by siblings Chris and Linda Tawil as a makeup brush brand, the Los Angeles-based beauty company shot to fame in the late 2010s after releasing products made in collaboration with the era’s most popular beauty YouTubers: James Charles, Jeffree Star, and Jaclyn Hill.

Morphe soon became “an influencer- and collaboration-driven brand” that was heavily reliant on eyeshadow palettes and brushes—“and that worked really well for a period of time,” says Simon Cowell, a beauty executive (not the American Idol judge) who joined Morphe as president in 2019. The brand made $400 million in revenue and reached a $2 billion valuation that year, according to Bloomberg. In 2020, its parent company Forma Brands began building up a portfolio of beauty companies including Ariana Grande’s R.E.M. Beauty and opening retail stores.

Then, many of Morphe’s key influencer partners fell from grace; Star got heat for racist videos while Charles was accused of sending minors sexually explicit messages. Though the brand ended its relationship with each creator, its reputation still took a hit, causing Forma Brands to close all 18 of its retail stores and file for Chapter 11 bankruptcy in January 2023.

Three months later, creditors Jefferies Finance and Cerberus Capital Management teamed up with consumer brand investment and operation platform &vest to acquire Forma Brands. Since then, &vest and Cowell, who now serves as the company’s CEO, have been trying to steer Morphe back toward profitability. And while the repositioning process is still far from over, the brand has made impressive progress by getting back to basics.

Simplifying product lines

Morphe’s founders created the brand in order to provide consumers with “elevated, prestige-level quality products at an incredible value,” Cowell says. But when the label’s influencer collaborations—which often featured bold eyeshadow palettes—began selling out, its priorities shifted to sustaining that momentum. The brand lost what “it really stood for,” he adds.

Knowing this, the first moves Cowell and &vest made after the acquisition were to hire a new executive team and re-center the business on this product-led founding ethos. They then went to work on Morphe’s existing offerings, improving quality, conducting detailed SKU reviews, and elevating packaging. 

That work is now paying off. After reducing its assortment of makeup brushes from 69 SKUs to about 35 and launching a simplified line in January, overall sales have grown 33 percent year-to-date, per a spokesperson.

At the same time, Morphe started developing a pipeline of new products to release. Just this year, the brand has introduced two new product categories, blushes and lipsticks—each of which, Cowell says, “have blown away our forecast.” He estimates that about 40 percent of Morphe’s sales now come from new product launches.

“What’s really encouraging about the growth that we’re seeing is it’s all unit velocity,” Cowell says. “It’s not like we took a bunch of price increases.” 

Sending influencers products rather than collaborating

Throughout this transition, Morphe has overhauled its marketing strategy. Instead of relying on “transactional partnerships” with high-powered influencers to drive brand awareness, Cowell says, the brand now utilizes product-seeding.

By sending mailers to influencers timed with product launches, Morphe nets a 60 percent conversion rate on average, per the CEO—meaning six in ten creators post about the brand online after receiving a mailer. These posts have pushed Morphe’s earned media value (EMV) up 85 percent year-over-year, which translates to real sales: Cowell says the brand makes about 50 times what it spends on product seeding.

Morphe is now doubling down on this strategy by sending out six times more influencer mailers in 2025 than it did in 2024 and building a small influencer relations team, which Cowell says operates similarly to a sales team. Each of the two representatives are tasked with getting to know and staying in touch with 500 influencers who use Morphe products. In doing so, the scrappy team has driven Morphe’s influencer retention rate to reach 70 percent.

Utilizing these two strategies in tandem—growing earned media value through large product seeding initiatives, while at the same time driving retention through influencer representatives—“is the unlock,” Cowell says.

Going all-in on wholesale

Morphe’s business model has shifted too. In the past, the company was focused on opening its own retail stores. Now, it’s going all-in on wholesale—though Cowell notes that Morphe still operates a “small direct to consumer business” through its e-commerce website. All of Morphe’s wholesale channels are growing, according to Cowell. “Last year, we grew mid-single digits,” he says. “This year, year-to-date, we’re up 40 percent” in comparable sales.

The makeup brand achieved this by improving how it shows up at retailers, first launching a national field sales team to offer more support to partners like Ulta and Target. Then, Morphe overhauled its freestanding shelving units to reflect the brand’s new look and product-first focus. 

“Overall, we’re more coordinated with our retail partners, aligning on joint marketing plans,” Cowell says. “We’re optimizing assortments by door. We’re using data to drive visual merchandising plans and replenishment decisions, and that has driven these tremendous wholesale results that we’re seeing.”

Morphe’s marketing budget reflects this shift. Cowell says he puts 60 percent of the budget towards wholesale channels and 40 percent towards brand marketing, which has allowed the brand to invest in visual merchandising and ensure retail displays are coordinated with its own campaigns.

Cowell says his goal is to double the business in the next three years by focusing on product and wholesale. Now, he adds, Morphe has “concrete initiatives lined up across expanding consumers, expanding categories, expanding channels,” that will allow it to “drive that growth.”