Subscription beauty box company Julep will lay off 102 employees and shut Seattle-area salons after its parent company Glanasol filed for Chapter 11 bankruptcy protection, reports The Seattle Times. Glanasol Holdings Inc. filed in U.S. Bankruptcy Court for the Southern District of New York, reporting liabilities ranging between $10 million and $50 million. Glanasol also owns Clark’s Botanicals Inc. and Laura Geller Beauty. Geekwire reports that Glanasol has entered into an agreement to be acquired by AS Beauty for $16.2 million.

“The board and management team have thoroughly assessed all of our strategic options and are confident that the proposed sale process represents the best path forward for the company,” said Glanasol CEO Nancy Bernardini. “We are pleased to have entered into an asset sale agreement with AS Beauty and are excited for the company’s future.”

Founded by Jane Park, a former Starbucks executive, in 2006, Julep offers full-size skincare, makeup and nail care products. When Julep was acquired by beauty company Glanasol in December 2016, Park stepped down from daily operations. The Seattle Times reports that Glanasol will continue to maintain the Julep brand and sell its products through its online store and retail stores including Nordstrom and Ulta.

The company will close Julep’s Seattle area headquarters in mid-February and move to New York, where Glanasol is based. Employees were given two months’ notice, and some will be offered positions in New York. Nail salons in Seattle’s University District and in Bellevue will close by the end of January.

At sign-up, Julep subscribers choose all nail products, all make-up and skin care products, or a mixture of both, as well their payment preference: pay monthly at $24.99 a month or prepay for three months or six months at $19.99 per month. Each new subscriber gets their first month free.

Julep was sold in 2016, shortly after the company was ordered to pay $3 million by Washington state Attorney General Bob Ferguson for using “deceptive ‘negative option’ marketing tactics” which convinced customers to sign up for monthly beauty boxes and then made it difficult for subscribers to cancel the service. The $3 million settlement included $1.5 million in restitution to consumers, $250,000 in costs and fees, and $1 million worth of hygiene products to be provided to qualifying charities and government institutions that serve victims of domestic violence, the homeless and prisons.

The remaining $250,000 was suspended, assuming that Julep and founder Park would not commit further violations. Another condition of the lawsuit was the company would be required to fully disclose terms, conditions and costs of the subscription service and to ensure that the company had sufficient staff to handle subscriber complaints and cancellations.

“It is maddening for consumers to receive products they don’t want but are charged for,” said Ferguson in a September 6, 2016 news release. “That’s a deceptive way to run a business, and I won’t allow a company to get away with it.”

Park responded to the allegations in a statement: “I want to take this opportunity to acknowledge and take responsibility for Julep’s previous practices that formed the basis of the AG’s lawsuit that was settled and announced today.”

It is not clear if the $3 million settlement caused Park to sell the company to Glanasol later that year.

Insider Take:

Though Glanasol says it will continue to maintain Julep operations, it is not clear if AS Beauty has committed to the same arrangement or how subscribers who have prepaid for three to six months might be compensated should AS Beauty decide to shut down or otherwise alter operations. If Julep continues, we hope they are familiar with subscription best practices to be transparent with pricing, terms and conditions, so it can avoid some of Julep’s missteps.