Dive Brief:
- Amid its Chapter 11 bankruptcy, dental care company SmileDirectClub has shuttered, according to its website updated on Friday. The company decided to cease its global operations effective immediately.
- The direct-to-consumer company’s dental aligner service and customer care support are no longer available.
- SmileDirectClub’s website notes that all orders that haven’t shipped have been canceled, its Lifetime Smile Guarantee no longer exists, and that potential refunds will depend on what next steps and measures the bankruptcy process determines.
Dive Insight:
SmileDirectClub’s closure puts to rest the company’s disruption to the dental care industry.
“SmileDirectClub has made the incredibly difficult decision to wind down its global operations, effective immediately,” the company’s website says. “Thank you for your support and letting us improve over 2 million smiles and lives.”
Customers on a SmilePay payment plan are “expected to continue to make all monthly payments” until full payments have been made according to the program terms.
The move comes months following a Chapter 11 bankruptcy after the company wasn’t able to secure third-party financing.
SmileDirectClub’s initial court filings showed that co-founders agreed to provide at least $20 million in a DIP Facility, with an additional $60 million in potential funding available if the company met certain conditions, including a net cash flow test. If the company did not succeed in a going-concern transaction between its filing time and Nov. 23, the DIP Facility was intended to be used for an “orderly and expeditious liquidation of the business.”
Despite being a telehealth oriented company, SmileDirectClub saw revenue decline during the height of the COVID-19 pandemic due to a variety of issues, including supply chain disruptions and labor shortages. The company’s existing liquidity issues were compounded by a legal dispute with Invisalign maker Align Technology, which resulted in a $63 million judgment entered against SmileDirectClub.
CFO Troy Crawford remained excited about the business’s future in its bankruptcy filings, stating “I look forward to continuing to work alongside leadership and our talented team to transform smiles with the reliability and quality our customers deserve.”
