Zoe Foster-Blake’s Go-To Skincare owners losses blow out to $100m

The beauty entrepreneur already saw the value of her share in her skincare brand drop by $30 million and now it’s suffered a further blow.

Beauty founder Zoe Foster-Blake has seen the majority shareholder of her Go-To skincare range take a huge hit as it suffered a $100 million loss for the first half of the financial year.

She sold a 51.5 per cent stake in her skincare business to beauty and wellness brand BMX in 2021 for $89 million and was expected to sell the remaining stake for the same amount.

But the embattled BWX business, which owns other brands such as Sukin, Nourished Life and Flora and Flauna, revealed ugly results that included overall revenue diving by 18.4 per cent to $79.7 million.

The $42 million company blamed the dive in revenue on its retailers stocking less products, spending money on its Victorian manufacturing facility and out of stock issues both in Australia and internationally.

BWX also incurred more than $60 million in impairments, which included writing down the value of its investment in skincare brand Purely Bryon.

It had previously recorded a staggering $337 million loss during the previous 12 months – which saw Ms Foster-Blake’s value of her share in Go-To written down by $30 million.

Zoe Foster-Blake sold a majority share in her Go-To Skincare business back in 2021 for $89 million. Picture: Belinda Rolland 2022/AGNSW

But the ugly times could continue for BWX with its auditors PwC issuing a warning about its future amid concerns over its trading conditions and management’s inability to overhaul the business.

It’s reported “material concern” it might not continue in the future and said it would need an injection of support from bankers and other creditors and a further sell-off of assets.

“There is a material uncertainty, which may cast significant doubt [over] whether the group will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial reports,” PwC said.

The company’s net assets were $13.3 million in the six months to December 31, compared with $98.5 million on June 30.

Zoe Foster-Blake’s backer of her business recorded a $100 million loss for the first half of the financial year. Picture: Image/Josh Woning

BWX’s current assets also exceed current liabilities by $14.2 million – helped by an unconditional waiver from financiers Commonwealth Bank – but if this wasn’t in place, the company’s auditors suggest liabilities would have exceeded current assets by $40.8 million.

“Management has prepared forecasts that show a requirement for the group to secure additional debt financing in addition to its current facilities, either from its current banker or other financiers on acceptable terms, for the group to continue to operate as a going concern for the foreseeable future,” the report said.

BWX said it is “focused on restoring profitability to the group” during the second half and anticipated that revenue will be in the range of $150 million to $175 million, while second-half earnings will be in the range of $5 million to $12 million.

But this relies on the company restructuring its debt, organisational restructures and its manufacturing planet resolving out of stock issues.

BWX said Go-To Skincare would remain independently operated when it was purchased. Picture: Supplied

The brand’s woeful results also saw its CEO depart effectively immediately to “enjoy some family time” and explore other opportunities, the board said, despite holding the position for less than a year.

BMX chairman Steve Fisher noted the “concern” and frustration of investors, which include billionaire mining magnates Andrew and Nicola Forrest, but said cost trimming and refreshing the board and management are steps that would be taken to renew the business.

The outgoing CEO will be replaced by former Coles chief sustainability, property and export officer Thinus Keeve.

Ms Foster-Blake started Go-To back in 2014. Picture: Supplied

At the time of BWX taking a stake in Go-To, it said it would remain an independently operated, stand-alone, founder-led brand but it would leverage its new controlling shareholder’s expertise and capability in certain areas, with Ms Foster Blake to remain a strategic investor, chief creative officer and board director.

It had sealed a five-year supplier deal with Chemist Warehouse Group in February 2021 and said her 2014-born company had a range of “simple, trusted and effective skincare products” for the mass market which had a luxury feel and in 2020 it generated $36.8 million of revenue.