Drunk Elephant’s sales dropped 65% year-over-year in early 2025. Layoffs followed. Then came the headlines, the social media speculation, and the inevitable question: is the brand finished?
The short answer is no. But the longer answer matters more, especially if you’re trying to understand what actually happened and where the brand stands right now.
This article covers the real sales numbers, what Shiseido is doing with the brand, why the shutdown rumors spread so fast, and what the evidence actually shows.
Drunk Elephant Is Not Going Out of Business — But It Is in Trouble
Let’s get the core question out of the way first. There has been no bankruptcy filing. Shiseido has not announced it is closing the brand. No confirmed shutdown is on the table.
In fact, Shiseido has publicly stated it is pursuing a turnaround for Drunk Elephant, not an exit. That’s a meaningful distinction. A brand can be struggling badly and still stay operational if its parent company decides to fund a recovery instead of pulling the plug.
According to Cosmetics Business, Shiseido is actively working to bring the brand back rather than walk away from it. Business of Fashion reports that Shiseido expects a profit rebound in 2026 — and that forecast only makes sense if Drunk Elephant is still operating.
What we’re looking at is brand distress, not business failure. Those two things can look similar from the outside, but they lead to very different outcomes.
What the Sales Numbers Actually Show
The 65% year-over-year sales drop is real. Forbes reported the figure, and it’s a large, material decline — not a rounding error or a minor dip.
The weakness is concentrated in the Americas, which happens to be Drunk Elephant’s primary market. That makes the damage harder to absorb. When your biggest market underperforms, there’s no other region to offset it.
The decline was serious enough to trigger a write-down that had a visible impact on Shiseido’s broader financial results. When a subsidiary drags down the parent company’s numbers, it becomes a corporate-level problem, not just a brand-level one.
But here’s the important part: a steep sales drop is a serious warning sign, not a closure notice. Those are different things. Companies post large losses and continue operating all the time, especially when a well-resourced parent company sees a path to recovery worth investing in.
The numbers tell you the brand has a serious problem. They don’t tell you the brand is done.
Why Drunk Elephant’s Sales Fell This Far
The decline didn’t happen in a vacuum. There are real business and brand factors behind it.
Drunk Elephant built its reputation on clean beauty positioning and viral social media appeal. That combination worked well for a while. It created fast growth and wide recognition. But it also created a customer base that was broad and trend-driven rather than deeply loyal.
The brand’s tween popularity added to the problem. A wave of younger consumers — many of them far too young for active skincare ingredients — adopted Drunk Elephant products after seeing them online. The backlash was predictable. Critics argued the brand was either targeting or at least failing to redirect an audience that didn’t need retinol and exfoliating acids.
That controversy did real damage. It pushed away some of the original core customers who felt the brand had lost its identity. According to BeautyMatter, the backlash contributed to broader brand fatigue.
But the tween issue wasn’t the only problem. Forbes points to a wider positioning drift. The brand’s messaging became diluted. It stopped being clearly about performance skincare and started being associated with aesthetics, packaging, and social media clout. When the trend cycle moved on, there wasn’t a strong enough product-and-results narrative to hold the audience in place.
These are positioning and messaging failures. That’s important because both of those things can be fixed — which is exactly what Shiseido appears to be trying to do.
What Shiseido Is Actually Doing With the Brand
In January 2026, Drunk Elephant announced an evolved brand direction. That’s not the language of a company winding down. That’s active brand management.
The reset involves moving away from the clean beauty and viral social media framing. The new direction pushes toward science-backed, performance skincare positioning — a deliberate effort to rebuild credibility with a results-focused audience.
The marketing campaign that came with it — “Please Enjoy Responsibly” — is a direct response to the tween controversy and overexposure. According to BeautyMatter, it signals an attempt to reframe who the brand is for and how its products should actually be used. That kind of campaign doesn’t get made by a brand preparing to shut down.
Layoffs did happen alongside the restructuring. That’s worth acknowledging. Job cuts are painful, and they’re also one of the main reasons shutdown rumors spread quickly. When people lose jobs, it looks like a company collapsing from the outside. In practice, layoffs are a standard part of most turnarounds — companies cut costs to stabilize before investing in a rebuild.
Shiseido’s 2026 profit rebound forecast, as reported by Business of Fashion, is also telling. A forecast like that assumes Drunk Elephant continues to operate and contribute to the group’s results. Companies don’t forecast rebounds based on brands they’re quietly shutting down.
Why Rumors Like This Spread — and What They Get Wrong
Layoffs, a sales drop, a write-down, and a rebrand all happened around the same time. Each of those events, on its own, can generate concern. Together, they can make a situation look much worse than it is.
Most people don’t follow corporate restructuring closely. When they see headlines about layoffs and falling sales, the natural interpretation is that the company is failing. That’s not unreasonable — but it’s not always accurate.
The key mistake is treating warning signs as confirmation of closure. A brand with declining sales that is actively repositioning, running new campaigns, and backed by a parent company with a public recovery plan is in a very different position than a brand that’s been quietly discontinued or is filing for bankruptcy.
Drunk Elephant is also still being sold through major retail channels. Distribution expansion and financial distress can coexist — a brand’s presence in stores doesn’t automatically mean it’s healthy, but it does mean it hasn’t been pulled from the market.
The pattern here — popularity spike, overexposure, backlash, then a messaging reset — isn’t unique to Drunk Elephant. Other beauty brands have gone through similar cycles. The outcome depends on whether the parent company has the resources and the will to invest in a real fix, and right now, Shiseido appears to be doing exactly that.
If you follow business news regularly, The Business Flick covers these kinds of brand and corporate stories in plain language worth bookmarking.
Where Drunk Elephant Actually Stands Right Now
Based on what’s been reported, Drunk Elephant is a brand in repair mode. The sales numbers are bad. The brand lost its identity. The tween controversy accelerated a backlash that was already building. Layoffs happened.
But Shiseido hasn’t walked away. It has committed to a turnaround, launched a repositioning effort, and built a financial forecast that assumes the brand continues. That’s not a shutdown scenario — it’s a recovery attempt.
Whether the turnaround actually works is a separate question. Repositioning an overexposed brand is genuinely hard. Getting back the customers who moved on takes more than a new campaign. And the performance skincare space is competitive, with well-established players who’ve owned that territory for years.
But going out of business? Based on the current evidence, that’s not what’s happening.
The more accurate description is this: Drunk Elephant grew fast, lost its focus, got hit with serious sales decline, and is now trying to rebuild under new positioning. Whether that rebuild succeeds is still an open question. But the brand is still operating, still backed by its parent company, and still being actively managed.
That’s not a closing announcement. That’s a business trying to fix what went wrong.
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