SmileDirectClub, a telehealth company that sold teeth-straightening devices by mail order and faced criticism from medical groups, said Friday it had closed.
The company, founded in 2014, sold dental aligners online and in its stores for $1,850. He marketed them as a faster, cheaper alternative to braces. SmileDirectClub’s initial public offering in 2019 valued it at $8.9 billion.
SmileDirectClub served more than two million customers for almost a decade. But the company was unprofitable and filed for Chapter 11 bankruptcy in September with nearly $900 million in debt, court documents and financial statements show. And this year, it settled a lawsuit from the District of Columbia attorney general’s office that had accused the company of using confidentiality clauses to stifle consumer criticism.
On Friday, SmileDirectClub he said on his website that it would close its global operations immediately. He apologized to customers for the inconvenience and urged them to consult a doctor or dentist about future treatments.
Pending orders have been cancelled, the company said. Customers on a monthly installment plan are expected to continue making all payments. Those who have completed the treatment will no longer be eligible for the free touch-ups that the company had guaranteed.
For customers seeking refunds, SmileDirectClub said it would have more information “once the bankruptcy process determines next steps.”
SmileDirectClub was founded in Nashville by childhood friends Alex Fenkell and Jordan Katzman. To order its products, customers made a mold of their teeth at home with a kit mailed by the company or had their teeth scanned at a “SmileShop” retail store. The scans were reviewed by dentists and orthodontists in the company’s network.
SmileDirectClub’s services, which did not require in-person visits, had drawn criticism from dental and orthodontist groups. The company has sued some of those critics and accused California’s dental board of stifling competition.
After going public, the company’s shares were trading at around $18 each, but were later converted to penny stocks. As the company failed to turn a profit, it also faced legal fights throughout its existence and dissatisfied customers who accused it of false advertising and violating Food and Drug Administration regulations.
SmileDirectClub offered refunds within 30 days of your aligners arriving, but anything after that was considered outside the company’s official refund policy and came with a confidentiality provision, The New York Times reported in 2020. The deal It prohibited customers from informing others about the refund and required asking them to remove negative posts and reviews on social media.
The District of Columbia attorney general’s office sued the company in 2022, accusing it of preventing customers who had been harmed by its products from filing complaints with regulators or authorities. Under an agreement to resolve the litigation earlier this year, SmileDirectClub was required to release more than 17,000 customers from the settlements and pay $500,000 to the district. The company said in the settlement that it had not violated the law or engaged in unfair or deceptive practices.
