Majority owner of Zoe Foster-Blake’s beauty business collapses
Now the company that owns half of Zoë Foster-Blake’s beauty brand is collapsing with the ‘boss lady’s’ Go-To brand up for sale
- BWX announced Tuesday that it is being administered voluntarily
- The brands include Sukin and Zoe Foster-Blake founded Go To
Cosmetics company BWX has collapsed after failing to arrange refinancing.
The publicly traded company, which owns Sukin, among others, and a majority stake in Zoe Foster-Blake’s Go-To brand, was placed under voluntary governance overnight.
In an ASX statement released Tuesday, the company said it had appointed FTI Consulting as trustees, but Go To was being sold separately.
“The directors have been actively working to find a compatible buyer for BWX’s 50.1 percent stake in Go-To,” the statement said.
“The trustees intend to continue this sales process.”
Ms. Foster-Blake founded Go To in 2014 and sold a majority stake in the company to BWX in 2021 in a multi-million dollar windfall (pictured with husband and comedian Hamish Blake)
BWX said in a statement to the ASX that it was trying to sell Go To off, which is profitable and managed independently of its other brands
BWX had breached debt covenants with its lender Commonwealth Bank since November.
The bank extended a waiver until March 31, but BWX announced Monday that a new refinancing deal with the CBA could not be reached.
“In light of recent communications from the company’s lender, the company’s board is considering how best to protect the interests of the company and the group as a whole in the absence of an agreed refinancing,” the company said in a statement. to the ASX.
BWX suffered a $335 million loss in fiscal year 2022, when mining magnate Andrew Forrest stepped in to save the company.
The company insisted on Tuesday that Go To was a stand-alone and healthy company and they were confident in finding a buyer.
“Go-To is managed and operated independently of BWX, with a completely separate treasury function and separate cash flow management, including accounts payable.”
It added that Go-To does not share manufacturing or development capabilities with BWX, and sales and retail partners were handled by its own team.
BWX purchased its majority stake in Go-To in 2021 for $89 million.
The original deal included an option to sell the remaining shares to BWX in 2024 for an estimated $59.2 million.
Ms. Foster-Blake can exercise a put option included in the original deal to redeem her remaining shares in Go To in 2024
BWX said a “series of issues” had affected the company’s finances, including “rundowns in stocks, inventories and working capital issues.”
The company said earlier in June 2022 that it had ended its practice of “investment buying” which sells more inventory to retailers than is demanded.
Clearly, new cash flows became a problem for BWX as retailers lost their backup inventory.
Ms. Foster-Blake’s company distanced itself in an earlier statement from BWX.
Go-To operates as an independent entity and manages its own treasury, formulations, production and relationships with retailers.
“We have an independent Sydney-based team led by our CEO, Brad Dransfield, and have no financial, manufacturing or supplier relationships with BWX.”
“The Go-To business is in a strong position with double-digit growth to date.”
Go-To was recently launched in Europe through the German cosmetics chain Douglas.