Make Up Store's financial reconstruction failed — and made the company worse

Make Up Store was a Swedish cosmetics chain founded in 1996 in Stockholm. At its peak it operated 13 own stores across Sweden and had 260 sales points in 22 countries through franchise and retailer agreements. The company sold makeup and beauty products through its own stores, an e-commerce platform, and wholesale partnerships.

By February 2020 the company could no longer pay salaries. It entered a financial reconstruction process (företagsrekonstruktion) — a Swedish legal mechanism meant to give distressed companies breathing room to restructure debts and operations. The reconstruction was intended to save the business, but it failed to restore the company's finances. Swedish business media reported that the reconstruction process itself worsened the company's situation: 'rekonstruktionen stjälpte bolaget' (the reconstruction tipped the company).

Make Up Store AB and its subsidiary Make Up Shop Sweden AB were declared bankrupt on 9 March 2021. The bankruptcy estate — consisting of the 13 stores, e-commerce platform, franchise agreements, and inventory — was put up for sale. After a bidding war among three financially strong bidders, the business was acquired by Lyko Group, a Swedish beauty e-commerce company. Lyko took over the stores and continued to operate the Make Up Store brand.