Failed Brazilian Beauty firm transferred clinics to founder’s daughter

A company controlled by Brazilian Beauty founder Francesca Webster sold nine clinics to her daughter for zero dollars before the firm collapsed owing up to $1.7m.

A company controlled by Brazilian Beauty founder Francesca Webster sold nine clinics to her daughter for zero dollars before the firm collapsed last month owing up to $1.7m.

Bill Karageozis and Paul McLeod, of McLeod & Partners, were appointed administrators of Brazilian Beauty Stores last month while Webster was on an extended holiday in Europe. A report to creditors lodged with ASIC by the liquidators this week disclose that a company called Brazilian Beauty Clinics, of which Webster’s daughter Alexandra Ramsay is the sole director, entered into a sale agreement in late June to acquire nine clinics from Brazilian Beauty Stores.

According to the report, the sale agreement valued fixtures, stock, good will and security deposits at $198,900 but this was offset by a liability of $857,971 related to gift cards, loyalty debt and pack sale liabilities. This meant the purchase price payable by Brazilian Beauty Clinics was “$nil.” The administrators said they may have a potential claim of up to $76,000 after recovery costs against Brazilian Beauty Clinics on the basis the sale agreement contained “uncommercial” terms. Creditors are due to meet next Tuesday to determine if the company should be wound up and liquidated.

In an email to City Beat, Webster said: “I’ll be back in Brisbane Wednesday next week and I’m happy to sit down with you to respond to your questions and give you further insight into the full story.” Comment also has been sough from Ramsay.

Francesca Webster

The report to creditors said Webster’s companies hit financial strife in the 2019/2020 financial year when following a legal dispute Brazilian Beauty’s 14 franchisees left to set up their own stores. This deprived the company of its main source of income in the form of franchise, marketing and advertising fees received from the clinics.

Documents lodged with ASIC in October show Brazilian Beauty Stores and a related firm called Brazilian Beauty (Australia) combined owe creditors more than $4m including $1.2m to the Australian Taxation Office, $247,000 to the Queensland Rural and Industry Development Authority and Office of State Revenue $128,000.

Liquidators said the company’s financial difficulties could be attributed to the Covid-19 pandemic, trading losses, inadequate cash flow and poor strategic management.

They said government subsidies including JobKeeper had funded trading losses in recent years along with the non-payment of taxation withholding liabilities.

English-born Webster opened her first Brazilian Beauty salon in New Farm in 2004, expanding to 20 stores over the following decade with ambitions to open 50 around the country. Along the way she picked up several gongs including a finalist in the 2014 Telstra Business Women’s Awards. Webster’s Facebook and Instagram postings earlier this year show her enjoying a holiday in Barcelona and her native United Kingdom.

Copy that

A few years back the Brazilian Beauty founder hit the headlines for a completely different reason. At the time, Webster was so attached to her then 13-year old dog Scampy that she wanted to clone him. Webster had already preserved the DNA of Scampy and had seriously considered cloning him.

She later decided not to as the current overseas cloning options had turned her off the practice for now, and she planned to wait until pet cloning became available locally.

Pet cloning is now commercially available in South Korea, China, the United Kingdom and the United States, where firms command about $72,000 to clone a dog or $50,000 to clone a cat. Two of Barbra Streisand’s dogs are cloned from an earlier pet she owned.

Francesca Webster and Scampy