Online cosmetics retailer Beauty Direct has blamed its suppliers’ country-based agency agreements as the main reason for it not breaking into the Australian market.
Beauty Direct’s board and chief executive Bronwyn Evans says the company's main suppliers are “struggling with the internet and what it is doing to their agency agreements in each country”.
“We are currently working with them to understand how our export policy can work for those brands. It is difficult to market a site to Australia when only some of the brands will support export sales,” it says in a statement to the stock exchange.
Beauty Direct says the lack of supplier support meant sales for the period ended September 30, 2000 were $194,000 below the forecasted result. Sales were $226,000 net before discounts and rebates.
Around the world, several cosmetics retailers have closed their doors this year after encountering similar agency and licensing problems and after several big name brands such as Estee Lauder said they would never let a non-traditional retailer sell their products online.
They also could not match the manufacturing and distribution chains of the giants.
Beauty Direct has also announced a conditional acquisition agreement with cosmetics distributor CS Company will not go ahead after major conditions in the agreement could not be filled. Beauty Direct had wanted the use the company’s distribution chain.
Beauty Direct posted an adjusted operating loss for the half-year of $472,000 and expects to make an operating loss for the next six months to March 31, 2001 of $205,000.
It says it has $2.1 million set aside for other investment opportunities and will expand into general pharmacy products, jewellery, lingerie and homeware next year.