The skin care and anti-aging specialist is in the process of expanding into emerging markets from India to Central America and insists that despite initial losses its business model remains sound and will prove successful in the medium term.
Net sales increased 10.6 percent to $CAD4.4m for the year ending July 31, 2007 but high administrative costs led to an operating loss of $CAD2.3m.
Faces Cosmetics said the causes of the heavy losses included restructuring costs, written off stock and the raising of pre-IPO funds and that many of these items were non-recurring and exceptional.
Despite the losses the company plans to steam ahead with its expansion plans that will see it establishing a significant presence in the Middle East and India.
Faces Cosmetics is seeking to build on its established network of retail franchises.
Currently its products are sold through 56 mainly franchised retail outlets in Canada, the US, Mexico and Ireland.
The company intends to develop its position in India slowly by selling its products through an established retailer and then over the next year to 18 months through several group owned stores.
These will be used as training centers for franchisees.
As well as expanding into new markets Faces Cosmetics will continue to pursue growth through product launches.
During the last year the company launched 30 professional spa products in addition to skin care, anti-aging and color cosmetic products.
In the coming year the company plans to release a water resistant mineral powder line with SPF 25, a glitter eyeliner, an intensive therapeutic foot cream, and a skin foundation line.
The company also plans to launch body care and mineral makeup lines in the spring.
Faces Cosmetics has been listed on the Alternative Investment Market (AIM) since September, 2006.