26 stores at cosmetic chain collapse, fate of remaining stores hangs in balance

A whopping 26 stores have plunged into liquidation while a looming vote will determine the fate of 85 staff members.

Creditors have voted to plunge 26 clinics in a struggling beauty chain into liquidation, while the fate of the remaining 16 hangs in the balance.

Last month, news.com.au reported that Body Catalyst, a non-surgical cosmetic medicine chain with clinics across NSW, Victoria and Queensland, had appointed an administrator.

On Tuesday, a meeting took place where creditors voted to place 26 clinics, which had all shut down prior to the administrator’s appointment, into liquidation.

Another meeting is scheduled for Tuesday next week where creditors will decide whether the remaining stores can continue operating or whether they too should shut down permanently.

The decision will affect 85 staff members who are waiting to see if they will still have jobs by this time next week.

Body Catalyst owes $5.3 million to unsecured creditors and a further $3.2 million owed to secured creditors, the administrators told news.com.au.

That comes in at a total of $8.5 million.

Body Catalyst, the 34-clinic cosmetic medicine chain that has collapsed into administration. Picture: Facebook.

Body Catalyst founder and former CEO Samantha Barakat Light is hopeful that the struggling cosmetic chain can scrape its way out of financial trouble.

“We are confident in the new structure for Body Catalyst that’s being put to creditors next week,” she told news.com.au.

“The Body Catalyst group has a strong foundation, loyal staff, and supportive clients.”

The beauty chain’s administrator Alan Walker, from insolvency firm WLP Restructuring, who is now also the liquidator of the defunct 26 stores, reiterated hopes to trade the group out of disaster.

A spokesperson for WLP Restructuring said by liquidating the 26 stores, this now lets them focus their attention on saving the remainder.

A Deed of Company Arrangement (DOCA) has been proposed, which is where a certain amount of money is paid to take the businesses out of external administration and returned to the original director.

Under the DOCA, priority creditors – which staff would come under – will receive 100c for every dollar owed while unsecured creditors will get 3.2c.

The administrator estimates both groups of creditors will receive “nil” if they instead place the stores in liquidation.

“To enable creditors to focus on the DoCA proposal, the Administrators brought forward a meeting concerning 26 companies, each representing a clinic that had already closed,” a WLP spokesperson told news.com.au.

At the meeting, “creditors voted to place these companies in liquidation”, they added.

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Samantha Barakat Light is hopeful the remaining clinics can turn it around and go back to being profitable.

In a report to creditors, released hours before the meeting on Tuesday and obtained by news.com.au, the administrator said it appeared Body Catalyst had been trading insolvent since at least June last year.

Growing tax debts, lower sales as a result of decreased discretionary consumer spending and fixed overheads were blamed as reasons for the chain’s failure.

Ms Light founded the business in 2015 but stepped down as CEO in May, the same time eight locations closed down in what appears to be an attempt to save the floundering beauty group.

She was replaced by Badia Kita who joined the company in 2022 to head up its New Zealand expansion.

Body Catalyst’s two New Zealand stores have not been impacted by the external administration process going on in Australia.

Body Catalyst provides non surgical cosmetic treatments such as fat freezing, cellulite reduction, non surgical facelifts, Botox, skin rejuvenation, skin tightening, body contouring, pelvic floor strengthening, muscle definer, fat cavitation and treatment for chronic back pain.

A total of 10 Body Catalyst clinics are located in Westfield shopping centres across Australia, so Westfield owner Scentre Group is likely to be among the major creditors along with other large property groups including Stockland and GPT Group.

In Victoria the company operates 15 clinics at Airport West Westfield, Armadale, Doncaster Westfield, Geelong, Glen Waverley, Hampton, Hawthorn, Ivanhoe, Melbourne Central, Moonee Ponds, Mornington, Port Melbourne, South Yarra, Southland Westfield and Williamstown.

There are nine clinics in NSW, at Bondi Westfield, Burwood Westfield, Camden, Castle Hill, Kotara Westfield, Mosman, Penrith Westfield, Shellharbour and Warringah Westfield.

In Queensland, there are five clinics at Chermside Westfield, Mount Gravatt Westfield, New Farm, Paddington and Robina.

– With Michelle Bowes

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Originally published as 26 stores at cosmetic chain collapse, fate of remaining stores hangs in balance