Whether it is an exclusive hotel spa or the nail salon at a suburban strip mall, the beauty industry has faced significant financial challenges that have led to bankruptcy filings and in some cases shutdowns over the last year.
Beauty tech firm Cutera filed a request for a prepackaged Chapter 11 bankruptcy in March 2025. Efforts to restructure and reduce its debt by $400 million were ultimately successful and Cutera ultimately emerged from bankruptcy by the end of last year.
At the start of 2026, two AS Beauty Group cosmetics brands Cover FX and Mally Beauty announced that they were permanently shutting down their online stores and labels. Both brands were founded by longtime insiders in the beauty industry like MAC Cosmetics co-founder Victor Casale and celebrity makeup artist Mally Roncal but cited a changing retail environment and customer needs as the reasons they could no longer stay in business.
Driftwood Yoga, Spa and Boutique files for bankruptcy protection in North Carolina courts
The latest company in the beauty industry to file for Chapter 11 bankruptcy is Driftwood Yoga, Spa, and Boutique. Based out of Denver in southwestern North Carolina, the spa served a local community with services that included yoga classes, massages, and various beauty and wellness treatments.
It opened in 2023 but, at the time of filing for bankruptcy protection in North Carolina Western Bankruptcy Court, had amassed debt of approximately $1.4 million. The boutique spa expressed intent to continue normal operations as it reorganizes its debt and, on Feb. 26, North Carolina Western Bankruptcy court granted it the right to “otherwise continue Certain prepetition customer practices in the ordinary course of business.”
This information is available only in bankruptcy records; the spa has not publicly commented on the filing or communicated news around the bankruptcy to its customers.
Over in Florida, Modern Medical Aesthetics also filed for Chapter 11 bankruptcy as a “small business debtor” earlier in February. The St. Petersburg company positions itself as a medical spa selling a range of aesthetics and wellness services like Botox treatments and laser hair removal.
Spa and beauty companies in different parts of the country filed for bankruptcy protection in 2026.
Which other spas and beauty brands filed for bankruptcy or shut down
In the bankruptcy filing, the company lists liabilities of between $100,000 and $500,000 owed to fewer than 50 creditors.
While Modern Medical Aesthetics indicated intent to continue operations, another medical spa in Alabama shut down in bankruptcy in January 2025 in a collapse that left customers with booked treatments with no way to recoup their money.
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Customers described paying up to $500 upfront for treatments only to find the “closed down” sign on the physical store a few days later while the website and social media pages for Body Oasis was also taken down. In earlier social media comments, owner Jacqui Kennedy Martin wrote that she “hate[s ..that] I cannot defend myself here.”
Another Florida spa, Small Indulgences Day Spa in St. Augustine, was liquidated in May 2025 in an abrupt shutdown that left the customers it served with no way to recoup the losses of paid treatments and dozens of now-worthless gift cards handed out by the spa.
Related: Another travel company files for bankruptcy, cancels all trips