Beauty Health Group, a retailer and distributor of beauty and health products across Australia and Asia that until last year was called Hailian International, has collapsed into administration.
The announcement comes not only as insolvencies are continuing to rise due to the ongoing economic turmoil, but also as the company suffered a tumultuous few years during which it attempted to change its strategy completely.
During this time a number of directors resigned, while a planned acquisition of an eCommerce services group was eventually called off.
In an announcement to the Australian Securities Exchange this morning, Beauty Health Group announced that John Vouris and Bradley Tonks of Lawler Partners were appointed as joint administrators.
Lawler Partners was contacted this morning by SmartCompany, but no reply was available prior to publication.
Previous announcements by Beauty Health Group, which last year changed its name from Hailian International and underwent a re-listing under the new entity, paint a troubled picture. In its most recent financial results announcement from 2010, the company posted a loss of $311,825 with debts of $699,260.
The business had previously invested in Chongqing Hailian University in China, but in 2007 said that this investment was “unsalvageable”. It had acquired the private university several years earlier in 2002, but was reportedly unable to account for rising costs.
The company attempted to switch strategies, and announced in 2008 it would acquire ecommerce business Zoogle Interactive. However, in 2009 it said this deal would no longer go ahead “due to late difficulties with the vendors”.
During the past two years, as it attempted to restructure into a beauty health and services group, the company appointed former Ella Bache head Karen Matthews as chief executive.
That appointment came after the group agreed to buy the Beauty Spa Company, an early-stage Sydney beauty and services and group that planned to roll out both franchised and managed beauty spas. The acquisition was worth $3.3 million, paid in shares.
However, last year it already flagged concerns about its own financial position.
“If the Group is unable to generate sufficient cashflows and reduce cash outflows… there may be a material adverse effect on the Group’s ability to continue as a going concern.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
