Why Lovely by Skin Institute was placed into liquidation

A message displayed on Lovely by Skin Institute's website. Photo / Screenshot

Lovely by Skin Institute was placed into liquidation following failed attempts to sell the business.

The beauty salon chain, which operated six stores across Auckland, was put into liquidation yesterday and permanently shut all of its stores due to poor trading.

The Herald understands staff were informed yesterday without prior warning.

John Fisk and Craig Sanson of PwC have been appointed as liquidators and will now investigate which assets the business has to sell.

Thirty-five staff have been made redundant as part of the process.

Fisk told the Herald all staff would be paid wages in full but it was not yet clear if there would be enough funds for holiday pay and other employee entitlements.

He did not yet know what the business owed staff and creditors.

Lovely by Skin Institute is the sister company of the Skin Institute Group and sold treatment packages including "buy 10 in advance" specials for skin treatments, including for laser hair removal. The business also operates subsidiary Off & On.

The Skin Institute is honouring any prepaid packages, vouchers and gift cards for Lovely, redeemable at either Off & On or the Skin Institute clinics. No refunds are possible.

Fisk said the business had no choice but to liquidate and was placed into voluntary liquidation by Skin Institute Group.

In May the Skin Institute began exploring the sale of the business but no buyer was found despite several interested parties.

Skin Institute Group chief executive Justin Liddell said all options were exhausted over this time without resolution, so the company had to liquidate and it was no longer viable to continue.

Liddell was previously CEO of Villa Maria Estate.

Lovely by Skin Institute opened its first store not long before the Covid-19 pandemic hit.

Fisk said the demise of the business followed a poor trading performance.

"We were approached a few days ago by the director, who determined that trading had not gone nearly as well as what they had hoped for," Fisk told the Herald.

"And a sales process that they had gone through had not resulted in any acceptable offers being received," he added.

"It was really unfortunate timing - they came into existence just when Covid was hitting and [the salons were located] in malls, which relied on a lot of foot traffic. I think they had a really bad start and were unable to recover from that."

Liddell said the core Skin Institute business continued to perform well.

That business performed medical treatment in the areas of skin cancer, veins, dermatology and appearance medicine.

"Since opening our first Lovely store in early 2019, our skilled and dedicated team has worked tirelessly to offer the best non-surgical appearance medicine treatments at affordable prices.

"Despite this dedication, the level of disruption Covid has placed on our Lovely business has been severe. This, combined with the ongoing economic impact ofthe pandemic, has led us to make the difficult decision to place Lovely by Skin institute into liquidation," Liddell said.

"On behalf of the Skin Institute Group I want to acknowledge the extraordinary effort and commitment of our talented Lovely team during what can only be described as incredibly challenging times."

A staff member told the Herald the situation was sad and "highly disappointing".

She said the company would be making further communication with its customers pending the liquidation process.