Massive blow for Zoë Foster-Blake as cosmetics giant which owns half her popular Go-To beauty brand collapses
- BWX announced Tuesday it is in voluntary administration
- Its brands include Sukin and Zoe Foster-Blake founded Go To
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Cosmetics business BWX has collapsed after being unable to arrange refinancing.
The publicly listed company, which owns labels including Sukin and a controlling stake in Zoe Foster-Blake’s Go-To brand, was placed into voluntary administration overnight.
In an ASX statement released Tuesday, the company said it had appointed FTI Consulting as administrators, but that Go To was being sold off separately.
‘The directors have been actively working to find a compatible buyer for BWX’s 50.1 per cent shareholding in Go-To,’ the statement said.
‘The administrators 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 it was trying to sell Go To off, which is profitable and is run independently from 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 on Monday a new refinancing agreement with the CBA could not be achieved.
‘In light of recent communications from the company’s lender, the Company’s board is considering how to best 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 losses of $335million in the 2022 financial year, when mining magnate Andrew Forrest stepped in to bail the company out.
The company on Tuesday insisted Go To was a self-contained and healthy business, and they were confident of finding a buyer.
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‘Go-To is run and managed independent of BWX, with a wholly separate treasury function as well as separate cash flow management including accounts payable.’
It added Go-To does not share manufacturing or development capabilities with BWX, and sales and retail partners was handled by its own team.
BWX bought its controlling stake in Go-To for $89million in 2021.
The initial deal included an option for the remaining shares to be sold to BWX in 2024 for an estimated $59.2million.
Ms Foster-Blake can exercise a put option included in the initial deal to offload her remaining stock in Go To in 2024
BWX said a ‘range of issues’ had affected the company’s financials, including ‘destocking, inventory and working capital issues’.
The company previously said in June 2022 it had discontinued its practice of ‘investment buys’ in which more stock is sold to retailers than there is demand for.
It’s understood new cashflows for BWX became a problem as retailers offloaded their backed-up stock.
Ms Foster-Blake’s company distanced itself from BWX in an earlier statement.
‘Go-To operates as an independent entity, managing its own treasury, formulations, manufacturing and retailer relationships, ‘ the brand said.
‘We have an independent Sydney-based team led by our CEO, Brad Dransfield, and no financial, manufacturing or supplier affiliations with BWX.’
‘The Go-To business is in a strong position with year-to-date performance seeing double-digit growth.’
Go-To launched in Europe recently via the German cosmetic chain Douglas.
