Sabon, the natural soap and body-care company, has filed for bankruptcy protection.
The New York portion of the company, the only U.S. state where it has stores, was started in 2003 by childhood friends from Israel, where Sabon began in 1997 and where the company continued to have its products produced. Sabon is likely known to many New Yorkers, if not by name, as the soap store that constantly had associates out on sidewalks in brown aprons, handing out mini-samples of soap. The company also sells a full range of body, bath, face and hair-care products.
Sabon wrote in first-day filings with a New York bankruptcy court late Friday that all channels of its business have been “devastated” by government measures to slow the spread of the coronavirus, which has forced the closure of all nonessential retail in New York for two months. The city is expected to begin reopening on June 8.
“Even assuming that the government-mandated closures imposed upon debtors’ stores are lifted within the next two or three months, debtors’ revenue streams have irreparably suffered and are unlikely to recover in a manner that would allow the debtors to meet its obligations to its creditors,” the company wrote in a filing.
As such, Sabon is seeking protection from all creditors. Although the company made individual bankruptcy filings for its eight individual stores and five other related business entities, it is seeking joint administration of the case. In the filing for its holding company, Sabon listed debts as between $10 million and $50 million and assets as less than $500,000, giving a clue that the company is in over its head in debts. The number of creditors is listed as less than 50.
Although the company did blame the coronavirus pandemic for its bankruptcy, Sabon did mention that “in recent years, given the change in the consumer habits that weakened the retail market, in-store sales have suffered.”
From the current filings, it is unclear if Sabon intends to sell its assets or liquidate, but no mention of reopening plans for stores can be found on its web site or social media. A page covering its online operations during the pandemic last updated at the start of May mentions that online orders will take up to three weeks to be processed and shipped. A representative of the company could not be immediately reached for comment.