SmileDirectClub, a telehealth company that sold teeth-straightening devices by mail order and faced criticism from medical groups, said Friday it has shut down.
The company, founded in 2014, sold 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 has served more than two million customers for nearly a decade. But the company was unprofitable and filed for Chapter 11 bankruptcy in September with nearly $900 million in debt, court filings and financial statements show. And this year, it settled a lawsuit by the District of Columbia attorney general’s office that had accused the company of using confidentiality clauses to stifle consumer criticism.
On Friday, SmileDirectClub she said on her website that it was immediately shutting down its global operations. He apologized to customers for the inconvenience and urged them to consult a doctor or dentist for future treatment.
Pending orders have been cancelled, the company said. Customers on a monthly installment payment plan are expected to continue making all their payments. Those who have completed the treatment will no longer qualify for the free treatments that the company had guaranteed.
For customers seeking refunds, SmileDirectClub said it will have more information “when 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 from the company or had their teeth scanned at a retail “SmileShop.” 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 sued some of those critics and accused the California dental board of stifling competition.
After the company went public, its shares traded around $18 apiece, but later became penny stocks. As the company failed to turn a profit, it also faced legal battles throughout its existence and disgruntled customers who accused it of false advertising and violating Food and Drug Administration regulations.
SmileDirectClub offered refunds within 30 days of its aligners arriving, but anything after that was considered outside the company’s official refund policy and came with a non-disclosure clause, the New York Times reported in 2020. The agreement prohibited customers from telling others for refunds and required them to delete 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 affected by its products from filing complaints with regulators or law enforcement. As part of a settlement to resolve the dispute earlier this year, SmileDirectClub had 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 broken the law or engaged in unfair or deceptive practices.
