Reflexions 'on course' for first acquisition

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London-based Reflexion Cosmetics, a company which was formed to
acquire businesses in the UK toiletries and cosmetics sector has
announced pre-tax losses for its first six month period in trading,
as it still waits to make its first purchase. Simon Pitman
reports.

Announcing half-yearly losses of £151,000 (€215,790), the company is still aiming to build a stronghold in the bath and beauty arena by acquiring under-performing brands in the toiletries, cosmetics and beauty products sector. The intention is to develop the brands and turn their fortunes around.

Initially the plan is to focus on cosmetics companies in the UK market, where it listed on the stock exchange back in February, with a view to developing both the domestic and international markets. The colour cosmetics, hair care and skin care sectors will be the initial targets.

"This type of strategy has already been carried out in the food industry, by companies such as Premier Foods, which has achieved great success buying up under-performing brands from leading companies such as Nestlé and Unilever,"​ said Datamonitor​ market analyst John Band.

"Undoubtedly similar opportunities exist in the UK cosmetics sector at the present time, both with regards to brands and smaller companies. However, traditionally cosmetics companies have either dropped or re-branded under-performing brands, something that could make it harder to pull off this kind of strategy in this segment,"​ Band added.

Reflexion Cosmetics' chief executive, Ratan Daryani, said that the company had been working hard towards securing its first acquisition, adding that there were a number of key opportunities in the market at present.

The company says it is planning on making a positive progress report with regards the status of potential acquisition bids in the near future.

It will also concentrate on contemporary brands that are affordable, but meet consumers' desires for high quality and luxury. A number of companies and brands in this category have already been identified as being under-marketed, the company says.

In marketing its products, it says it would like to consolidate suppliers by placing larger volume orders on a smaller supply base, allowing margins to be improved and better trading terms to be negotiated, which will in turn help to improve margins.

Related topics: Market Trends

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