Public face for online cosmetics

By DITA DE BONI

The year 2000's first e-commerce public offering hopes to link investors into a successful marriage of the busy modern woman and the convenience of online cosmetic shopping, says chief executive Bronwen Evans.

Ten million shares in online cosmetics company BeautyDirect were offered yesterday at 25c each in an effort to raise $2.5 million for aggressive expansion of services and distribution infrastructures here and offshore.

The offer will run until March 31 and BeautyDirect plans to list on the stock exchange main board on April 14.

Ms Evans says she sees no reason the concept of retailing cosmetics online will not follow United States trends, where the total internet shopping industry is worth $36 billion last year.

Women comprise 49 per cent of users "who knew what they wanted and were online shopping for the convenience of it," she says.

The BeautyDirect web site sells around 100 premium-end beauty products and has been trading online since last April. The company recorded sales of $55,348 in its first eight months and has projected this will jump to $997,000 by February next year. It is not forecasting a profit for several years.

Ms Evans says the projections are conservative and, with few overheads, the only thing needed to boost profit will be a necessarily large marketing budget.

One prime overseas market being targeted is Australia, where women annually spend $1 billion on cosmetics and $210 million on fragrances.

BeautyDirect has negotiated exclusive arrangements with large cosmetic houses such as Elizabeth Arden, La Prairie and YSL, and for many products it is the only web site to have negotiated online distribution rights.

The company's big drawcard has been its ability to secure contracts enabling it to sell products outside the US, to which most premium cosmetic houses confine their online activities.

Ms Evans says the agreements reached are "exactly the same as physical stores," but she would not reveal their duration.

BeautyDirect aims to expand operations to include a bricks-and-mortar operation in Auckland (to join its other physical site in Wellington), to widen the product range to include products "for inner and outer beauty," expand its distribution infrastructure and develop an additional web site.