The global beauty industry is booming, and Mordor Intelligence predicts that the Australian market will be worth more than $7 billion by the end of 2020, with annual growth of 9.31 percent since 2015. However, that doesn’t mean everyone is seeing growth—the 24-year-old Australian brand Napoleon Perdis has entered voluntary administration.
THE TIMELINE:
1992: Napoleon Perdis started his first makeup studio in Leichhardt, Sydney.
1993: Napoleon Perdis launched a makeup academy and authored the makeup manual, Forever Flawless.
1995: Napoleon Perdis’ namesake brand was founded with a $30,000 loan from Perdis’ father, and the business has been a family-run venture ever since.
1997: The brand secured a distribution deal with Myer.
2004: Napoleon Perdis debuted on the BRW Rich List with a worth of $20 million.
2011: Napoleon Perdis had 73 stores across Australia and New Zealand.
2014: Revenues jumped 14 percent to $92.2 million in 2014, but losses almost tripled to $1.6 million as the company expanded into the US.
2015: The brand pulled the plug on its American business to focus on the Australian market. At one point, Napoleon Perdis products were stocked at Bergdorf Goodman, Dillard’s, Neiman Marcus, and Nordstrom, as well as at 2,000 Target and Ulta stores across the US and a branded flagship store in Beverly Hills.
The brand was reportedly doing $120 million in retail sales a year for its various cosmetic brands in the Australian market but was only turning over $17 million in sales in the US after a decade in the market.
Signed a deal with Dubai-based Luxuria Trading to distribute products across the Middle East.
The company made a loss in both the 2014 and 2015 financial years, reporting in its 2015 accounts that its short-term liabilities exceeded its assets by more than $3.8 million.
2016: Napoleon Perdis, Emanuel Perdis, and Soula-Marie Perdis renegotiated the company’s finances with its bank and, in a comment to the Sydney Morning Herald, claimed the business was back in the black.
2017: Napoleon Perdis hired Allier Capital to find a strategic partner who could help fund the company’s ambitious expansion plans: a $100 million empire spanning 85 concept stores, 100 department store counters, and 750 independent stockists.
2018: Having concessions inside David Jones and Myer for many years, the brand signed an exclusive deal with Priceline, launching in 200 stores in August of last year.
2019: Napoleon Perdis Group appointed Simon Cathro, Chris Cook, and Ivan Glavas of Worrells Solvency Accountants as voluntary administrators. The business currently has 56 stores across Australia.
THE REASONS
Some people are blaming Mecca and Sephora for the Napoleon Perdis demise. Mecca has a footprint of 90 doors in Australia, New Zealand, and department store Myer, while Sephora has 17 stores and presence in department store David Jones.
Perdis’ explanation. “It’s a lot of things,” he tells AFR Weekend, pointing to factors as diverse as the banking royal commission, the downturn in the housing market, the surge of Amazon, and lack of foot traffic in traditional shopping centers as contributors to the company’s collapse.
WHAT’S NEXT?
The Napoleon Perdis directors have been trying to sell the business for several months. The current plan for the administration process is to see whether the business can be restructured through the process or a buyer is found while the business continues to trade.
In the voluntary administration process, a first meeting of creditors is held within eight business days of the appointment, and a second meeting of creditors is usually held within 20 to 30 business days after the appointment. It is at the second meeting that creditors will determine the future of the Napoleon Perdis brand.
