Customers owed $500k after two popular Melbourne laser and skin clinics collapse
Customers have been left $500k out of pocket after several popular Melbourne laser and skin clinics went bust, racking up over $5m in debts and landing the director in possible hot water.
Cosmetic Health
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More than 1000 customers of a popular Melbourne laser and skin group are facing losses after two of its clinics went bust.
The administrator for several businesses linked to Australian Laser & Skin has also warned its director may have breached corporations law after company assets were allegedly used to secure a loan for a property owned by his wife.
The group, which operates 11 clinics across Greater Melbourne, has shut two sites in Mornington and Moonee Ponds after their holding companies collapsed into insolvency.
That has left more than a thousand deposit-paying customers nearly $500,000 out of pocket, which averages to $500 per person.
The company, known for skin treatments, cosmetic enhancements, teeth whitening, laser hair removal and skin rejuvenation, was founded in 1998 with a “vision to unite patient concerns with the most advanced, proven, non-invasive medical technology”.
“With over 20 years of experience we have the strongest reputation as one of the most trusted, respected and professional Laser Clinics in the industry,” their website reads.
Four businesses under the brand – Alsc Admin, Alsc Australasia, Alsc Mornington and Australian Cosmetic & Laser Clinic – entered liquidation last month, a notice lodged with the corporate regulator reveals.
Total unsecured creditor claims surpass $3.5m alone, reports by insolvency expert Richard Rohrt of Kennedy Ryan Advisory show.
Australian Cosmetic & Laser Clinic, which operated the Moonee Ponds site on Pascoe Vale Rd, collapsed owing 18 unsecured creditors more than $530,000.
This includes more than a thousand customers who have prepaid for treatments at the clinic and/or have unused sessions owed $352,244.
Eight employees were sacked as a result of the Moonee Ponds closure, and were left $44,935 out of pocket, including for wages, superannuation and leave and redundancy entitlements.
Alsc Mornington, which operated the Mornington clinic on Main St, collapsed owing just under $250,000 to unsecured creditors, including $146,838 to deposit-paying customers and an additional $17,581 to employees.
Alsc Australasia – the franchisor of the chain of Australian Cosmetic & Laser Clinics operated in Melbourne – owes unsecured creditors over $2.35m.
This included related party debts totalling more than $1.4m.
Alsc Admin, which acted as an administrative and back of house support for the franchisor and other companies and franchises in the group, owes over $480,000 to unsecured creditors including $325,075 in related party debts.
All four businesses, which list Jim Kostakis as director, previously entered into voluntary administration in April.
With no rescue deal put forward to creditors by Mr Kostakis, creditors voted to liquidate the businesses a month later.
Although Mr Kostakis did not disclose any secured creditors, administrators found banking giant NAB had guaranteed a $1.3m loan and secured it against company assets.
Funds from the loan had been used to refinance a property owned by Mr Kostakis’ wife.
Mr Kostakis told administrators the property had been sold and funds raised were enough to discharge NAB’s security interest.
It’s understood the couple put their five-bed, six-bathroom, five-car Brighton home, featuring a cinema and gym, up for sale last year with an asking price of between $10.8m to $11.8m.
The property, which is registered under Mr Kostakis’ wife’s name, was listed online as being sold in September 2024.
Mr Rohrt said he was of the preliminary opinion that Mr Kostakis may have breached his director’s duties in the pledging of company assets to secure a personal asset of his spouse.
“A liquidator, should one be appointed … will conduct further investigations in respect of the registered security interest and any potential breaches of director’s duties, concerning the pledging of company assets to secure a personal asset of the director’s spouse,” he said.
The administrator and now liquidator also revealed a loan agreement for $284,500 to Mr Kostakis had been signed in November last year, but that he’d received the funds more than a year prior in July 2023.
Mr Rohrt said that Mr Kostakis told him he had signed the document “under duress”.
“My review of the company records is ongoing in relation to this loan account and any repayment made against the loan account,” Mr Rohrt said.
“Should it be determined that the director owes money to the company or companies following my reconciliation of the loan agreement, a demand will be made for repayment.”
Mr Kostakis is listed as the current director of 11 other registered businesses: Alsc Brighton, Australian Laser Skin, Inject Academy, Inject Group, Jek Corporation, Jk Realestate Investments, Premier Laser Clinic, Premier Laser Hair Removal, Skin Academy, The Skin Warehouse Australasia and Your Skin Destination.
Mr Kostakis attributed the company’s financial difficulties to insufficient cash flow which resulted in the director being unable to pay rent and a breakdown of communication between shareholders, Mr Rohrt said.
But Mr Rohrt also pointed to inadequate cash flow, a lack of working capital and allegations of breaches of franchise agreements as contributing to the demise.
“The company provided funds to related entities and shareholders of the company which negatively impacted the company’s ability to meet its short-term obligations,” Mr Rohrt said.
Mr Rohrt said he was aware of seven breach notices from several franchisees that had been received prior to his appointment.
“These breach notices alleged breaches in respect of mismanagement and misuse of marketing funds, and misleading and deceptive conduct concerning the intellectual property and use of trademarks of the franchisor,” he said.
It’s understood the Australian Laser & Skin brand now has 11 locations in Melbourne – Brighton, Camberwell, Greenvale, Hillside, Ivanhoe, Oakleigh, Reservoir, Ringwood, South Yarra, Werribee and Williamstown.
These clinics are independently owned franchises and continue to trade as normal.
At the time of the administrator’s appointment, the group was also advertising franchise opportunities available in Berwick, Mernda, Geelong, Richmond and Mount Waverley.
Angry deposit-paying customers from the Moonee Ponds site closure have recently flooded the clinic with dire reviews online.
“As per recent reviews I am waiting for my money back. Business supposedly gone out of business after selling gift cards just months prior,” one wrote.
“Some people received at least notification that their appointment was cancelled. I arrive for my appointment and the business is closed with a fake number on the door. Also tried to upsell my service the week prior. Unbelievable,” another said.
Mr Rohrt did not provide an estimated dividend for creditors of the companies that run the Moonee Ponds and Mornington clinics, but put his highest estimates for unsecured creditors of Alsc Australasia and Alsc Admin at two cents and 13 cents on the dollar respectively.
Mr Kostakis was contacted for comment.
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