Forum Archive Index - March 2000

["Gordon King" <gordon.k@clear.net.nz>]

I'd agree with most of these comments.  I think to subscribe to this
offering one would have to see two things.

Firstly, they would have to have some pretty good growth aspirations,
diverging product lines etc, otherwise I just don't see why this quantity of
money is required.  A pure clicks site, with well planned logistics doesn't
need a great deal of capital expenditure.  My suspicions in a minute.

Secondly, Does the prospectus discuss the nature of the supply contracts.
much has been made of how she has negotiated supply agreements with the
vanity merchants (you know the crap they spout normally.  To justify their
500% cont margins they have exclusive salon/department store distributions
etc).  If these relationships are exclusive, and can not be duplicated, I
would say there is a strategic asset there.

My gut feel is this.

1) Most of the money will be burned in working capital.
2) The supply agreements are non exclusive at heart, and are probably part
of the suppliers own strategies to increase their distibution channels due
to increased margin pressure/parallel imports etc.
3) Most cynically, I suspect that the real requirement for the volume of
cash is that the company is probably going to expand its bricks and mortar
(one store in wellington now right?).  Beauty products are generally an
emotional/touch/feel purchase, certainly for initial and transfer purchases.
That needs shops.

So overall I suspect this is a startup beauty merchant getting a listing
helping hand by putting e-.com in front of it.

Or I could be wrong, you decide (30%per month growth, bollocks)

Gordon

-----Original Message-----
From: owner-sharechat@sharechat.co.nz
[mailto:owner-sharechat@sharechat.co.nz]On Behalf Of Narena Olliver
Sent: Sunday, 12 March 2000 16:52
To: sharechat@sharechat.co.nz
Subject: Re: [sharechat] Beauty Direct


As the females on sharechat have been appealed to, I will put in my two
cents worth. I did glance at the piece on Beauty Direct in the Herald
last week so was a bit startled when it first appeared on sharechat -
which is an indication of the level of my interest in the float. I have
not looked at a prospectus and did think maybe I should before launching
off here but maybe just a few questions will do. How much money are they
looking for and for what? How much money does it take to develop a web
site with shopping cart facilties? How much for product? You don't need
big inventories with the web.I would probably buy cosmetics off the web
but that is not the point. Does one need to have a big float to put this
sort of business on the web? I've got a web site and I am intending to
put a gift shop on it. Will someone help me float it? I'm just a bit
cynical and think there are better investments around. ciao, Narena


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