Beauty giant Mecca late to report financials as ASIC weighs ‘concerns’ about delay

Mecca is promising to report its overdue key financial details ‘soon’ as the corporate regulator weighs concerns over the company failing to lodge its accounts since 2022.

Mecca booked a $26.9m profit after tax in 2022, up from $23.4m the year before. Picture: Britta Campion

Beauty giant Mecca could face heat from the corporate regulator for failing to lodge its company accounts for the past two financial years.

One of the largest privately owned retailers in the country, Mecca last submitted its accounts to the Australian Securities and Investments Commission in November 2023, covering its 2022 financial year.

In line with the legal requirements of all other large proprietary companies, ASIC should have received Mecca’s accounts within four months of its financial reporting period.

“We note the concerns raised about Mecca Brands Pty Ltd not lodging its financial reports with ASIC and are considering those concerns,” an ASIC spokeswoman said, noting the regulator was “unable to comment further on individual matters”.

Mecca founder Jo Horgan. Picture: Robbie Fimmano

A Mecca spokeswoman said “our results will be filed soon”, in response to questions from The Australian about why it had not lodged its 2023 and 2024 financial year accounts.

Mecca did not respond to queries about whether it was being afforded some leniency by the corporate cop, which took action against some other companies for missing the deadline.

In the 2023-24 financial year, ASIC prosecuted 12 companies for failing to lodge 56 annual financial reports. In all they were fined about $414,000.

Mecca’s most recent accounts revealed that in the calendar year to December 24, 2022, revenue was $971,524,000, up from $688,901,000 in 2021. The beauty retailer booked a $26.9m profit after tax in 2022, up from $23.4m the year before. Mecca employed 6192 staff across its companies, the 2022 report said.

While the 2022 accounts were lodged in November 2023, the company’s 2021 accounts were filed in June 2023 — more than one year late — according to ASIC’s register.

It means Mecca has been late to report its accounts every year since 2021.

According to IBISWorld’s top 500 list of Australia’s biggest private companies, Mecca ranked at number 70 last year with a revenue of $1.12bn — a jump of 15.6 per cent from the year prior — as at December 24, 2023.

Mecca’s founder Jo Horgan recently told former Domino’s CEO Don Meij’s podcast her business soared during the Covid-19 pandemic, a time when Australian households built up $300bn in savings according to the Commonwealth Bank and pushed the savings rate to 20 per cent — soaring above the average rate of six per cent.

Mecca has unveiled its new flagship store at Burnside Village, marking South Australia's first-ever two-storey Mecca.

“We took enormous share in the market. There was an opportunity for us then to double down and we invested enormously,” Ms Horgan said.

“We went to the bank and got an enormously eye-watering loan (during Covid).”

Ms Horgan estimated Mecca stores span up to 50,000 square metres of space now across 115 stores, a huge jump from her first ever store that opened in Melbourne’s South Yarra in 1997 with an initial 78 square metres.

Mecca is preparing to open what it says will be the “biggest beauty store in the world” on Melbourne city’s bustling Bourke St, while days ago it announced a new two-storey flagship store in Adelaide.

News about the delayed financial accounts came after a Mecca spokeswoman denied Ms Horgan is contemplating selling the business, whose success is founded on securing exclusivity deals with international luxury brands.

Former Australian Competition and Consumer Commissioner Graeme Samuel told The Australian exclusivity deals are all subject to competition law.

“If the consequence of them is that they will substantially lessen, or are likely to substantially lessen competition, then they will be banned. They’ll be outlawed,” he said.

“But exclusive deals have been around for years, and retailers, and in fact, competition has thrived on them. Whether it’s Mecca or anyone else, what they often do is set up exclusive deals in order to enhance their competitive capability in their particular retail market.”