👚New Chapter 11 Bankruptcy Filing - Lunya Company👚

On June 16, 2023, Santa Monica-based sleepwear e-commerce player Lunya Company filed a chapter 11 (Subchapter V) case in the District of Delaware (Judge Shannon).

We don’t typically pay much mind to Subchapter V cases (too small) but this one caught our interest — mostly because we saw it repeatedly on social media channels during the heart of the pandemic. Which makes sense: during the pandemic the company experienced tremendous growth due to a huge spike in e-commerce activity, generally, and demand for loungewear and sleepwear, specifically. Gross revenues peaked in ‘20 and ‘21 at just over $50m due, in large part, to highly efficient advertisements and customer acquisition on and from Facebook and Instagram. The company got ahead of its skis: “anticipating that the rapid growth of 2019 and 2020 would continue into 2021, team members ordered approximately sixty percent (60%) more inventory than was ultimately needed to support 2021 sales.”

But then Apple Inc. ($AAPL) did its privacy thing. Per the company: