SmileDirectClub, a telehealth company that sold teeth-straightening devices through the mail and faced criticism from medical groups, said on Friday that it had shut down.
The company, founded in 2014, sold teeth aligners online and in its shops for $1,850. It 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 over nearly a decade. But the company was not profitable and filed for Chapter 11 bankruptcy in September with nearly $900 million of debt, court filings 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 said on its website that it was shutting down its global operations immediately. It apologized to customers for the inconvenience, and urged them to consult a doctor or dentist about future treatment.
Outstanding orders have been canceled, the company said. Customers on a monthly installment payment plan are expected to continue making all of their payments. Those who have completed treatment will no longer qualify for the free touch-ups that the company had guaranteed.
For customers seeking refunds, SmileDirectClub said that 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 location. 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 dentist 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 traded at about $18 apiece but later became a penny stock. As the company failed to turn a profit, it also dealt with legal fights throughout its existence and dissatisfied customers who accused it of false advertising and of violating Food and Drug Administration regulations.
SmileDirectClub offered refunds within 30 days after its aligners arrived, but anything after that was considered outside the company’s official refund policy and came with a nondisclosure provision, The New York Times reported in 2020. The agreement prohibited customers from telling others about the refund and required them to delete negative social media posts and reviews.
The District of Columbia attorney general’s office sued the company in 2022, accusing it of blocking customers who had been harmed by its products from filing complaints with regulators or law enforcement. Under a settlement to resolve the litigation earlier this year, SmileDirectClub was required to release more than 17,000 customers from the agreements 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.
SmileDirectClub, a telehealth company that sold teeth-straightening devices through the mail and faced criticism from medical groups, announced on its website that it is permanently ceasing its global operations. The company apologized for any inconvenience caused and advised customers to consult with a doctor or dentist for future treatment.
Founded in 2014, SmileDirectClub offered teeth aligners online and in physical stores for $1,850, marketing them as a more affordable and faster alternative to traditional braces. However, despite serving over two million customers in almost a decade, the company struggled with profitability and filed for Chapter 11 bankruptcy in September, carrying a debt of nearly $900 million. Additionally, SmileDirectClub settled a lawsuit with the District of Columbia attorney general’s office, which accused the company of using confidentiality clauses to suppress consumer criticism.
The company has canceled all outstanding orders, and customers on a monthly installment payment plan are expected to continue making payments. However, those who have completed their treatment will no longer be eligible for the previously guaranteed free touch-ups.
For customers seeking refunds, SmileDirectClub stated that it will provide further information once the bankruptcy process determines the next steps.
SmileDirectClub, founded in Nashville by childhood friends Alex Fenkell and Jordan Katzman, allowed customers to order its products by making a mold of their teeth at home with a kit provided by the company or by visiting a “SmileShop” retail location for teeth scanning. The scans were then reviewed by dentists and orthodontists in the company’s network.
Despite drawing criticism from dental professionals due to its remote services, which did not require in-person visits, SmileDirectClub sued some of its critics and accused California’s dental board of hindering competition. After going public, the company’s shares initially traded at around $18 but later declined significantly. Alongside its financial challenges, SmileDirectClub faced legal battles and dissatisfied customers who alleged false advertising and violations of FDA regulations.
According to The New York Times report in 2020, SmileDirectClub offered refunds within 30 days of aligner arrival. However, anything beyond that timeframe was considered outside the official refund policy and involved a nondisclosure provision. This agreement prohibited customers from discussing the refund with others and required them to delete negative social media posts and reviews.
In 2022, the District of Columbia attorney general’s office sued SmileDirectClub, accusing the company of preventing harmed customers from filing complaints with regulators or law enforcement. Earlier this year, the company reached a settlement with the district, releasing over 17,000 customers from the agreements and paying $500,000. In the settlement, SmileDirectClub maintained that it had not violated any laws or engaged in unfair or deceptive practices.