Bwx collapse

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BWX was placed into voluntary admission this week, with the company falling into receivership the next day. The Directors believe entering Voluntary Administration will help progress the restructuring process already underway with new management at BWX and give the company the best chance of future profitability. Recently, the company acquired a The company attributed several factors to impacting these results including: customer de-stocking in key channels reduced revenues and associated cash receipts within the Australian operations, lower cash receipts and incumbent capital commitment outlays for the Clayton manufacturing facility, inability to maintain inventory at optimum levels, resulting out-of-stock issues in business units, decreased marketing and promotional activity, and more operational issues. Following the results release in February, Mr. Rory Gration departing with immediate effect who held the role for just one year.

Bwx collapse

ASX-listed company BWX is the latest case study of a significant retail brand collapsing under its own weight. Just last month, the beauty business entered voluntary administration, with its valuation plummeting faster than face cream on a hot day. While softening demand, excess inventory and an over-leveraged balance sheet were contributing factors, it was the hangover of its toppy acquisitions that put the final nail in the coffin. BWX Limited is an ASX-listed company based in Victoria, Australia that develops, manufactures, distributes, and sells natural skin and hair care products. Originally founded in by then-managing director, John Humble, the company was built up primarily by inorganic growth — in other words, growing by buying up other brands. In , BWX made its debut on the stock exchange after raising pre-IPO funds to acquire Sukin, its first significant purchase in the Australian skincare market. All the acquisitions were designed to increase market share and revenue. Below is a summary of the revenue growth they achieved over time. BWX only acquired Because of its much higher valuation multiple, BWX was essentially getting earnings accretion on the companies it acquired at a lower multiple. For example, in late , it bought This direct-to-consumer DTC model gets closer to the customer and generates high-profit margins compared to some of the older, more traditional brands in the BWX portfolio. Eleven consecutive interest rate hikes starting from May caused a market correction, and BWX came crashing down with it. Operational and working capital issues aside, public companies that paid toppy valuations on acquisitions funded with debt are also facing material impairment losses in their accounts.

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ASX-listed company BWX is the latest case study of a significant retail brand collapsing under its own weight. Just last month, the beauty business entered voluntary administration, with their valuation plummeting faster than face cream on a hot day. While softening demand, excess inventory and an over-leveraged balance sheet were contributing factors, it was the hangover of its toppy acquisitions that put the final nail in the coffin. BWX Limited is an ASX-listed company based in Victoria, Australia that develops, manufactures, distributes, and sells natural skin and hair care products. Originally founded in by then-managing director, John Humble, the company was built up primarily by inorganic growth — in other words, growing by buying up other brands. In , BWX made its debut on the stock exchange after raising pre-IPO funds to acquire Sukin, its first significant purchase in the Australian skincare market. All the acquisitions were designed to increase market share and revenue.

Bwx collapse

Skip to content. By Dean Blake March 20, Text Size. To say health and beauty conglomerate BWX has had a difficult few years could be an understatement.

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Go-To is run and managed independently and not included in the administration. The administrators intend to trade the Australian operations of BWX as usual. Search for:. It displays poor investment discipline. BWX had a whole set of operational issues to deal with, like cash flow losses, tanking share prices, and debt servicing. Because of its much higher valuation multiple, BWX was essentially getting earnings accretion on the companies it acquired at a lower multiple. They basically do a discounted cash flow valuation DCF on each business. Most trusted brands in the country revealed, as voted by Aussies. Australia cancels series in human rights protest 15 minutes ago. Where-to for Go-To? Young criminals repeatedly target year-old in regional NSW town an hour ago. The SmartCompany comment section is members-only content. The All Star Bash was an unforgettable glamorous evening of celebration as we recognised the best of the best in Australian retail. It was the final nail in the coffin for them.

BWX collapsed yesterday as Commonwealth Bank ceased to support the cosmetics group and its operations entered voluntary administration. The group had been in breach of lending covenants outlined by the Commonwealth Bank since November, yet the bank had agreed not to act on loan breaches until March

Leave A Comment Cancel reply. About the Author: Rosalea Catterson. Latest news. This article was first published by SBO Financial. In other words, CBA continues to be the first-ranked secured creditor, giving it the best chance to be repaid, and ZFB falls to the bottom with all the other unsecured creditors. It was the final nail in the coffin for them. As the economy and market continues to correct, we may see more companies succumbing to similar pitfalls. Share this story! The table below shows a summary of all the acquisitions and implied multiples. It means your assets are worth less than what you paid for them. Search for:. All the acquisitions were designed to increase market share and revenue.