Pharmacy tie-up offers hope as Beauty Direct losses mount

In response to a restricted transfer notice the company has told the market that its full- year loss to the end of March will be between $750,000 and $850,000.

When the company announced its interim result in December of $522,000 it forecast an operating loss in the second half of $205,000.

However in a statement Thursday to the stock exchange the company says that its full year loss will be "possibly worse by up to $100,000 than previously publicly anticipated by Beauty Direct at the annual meeting in September 2000".

Despite the deficit the company's directors say they expect that the anticipated close association with a new major shareholder in the company will have a positive effect on the company's business.

Lower Hutt pharmacist Gordon Ritson is intending to buy almost 27% of BDO and will work alongside the company's MD, Bronwen Evans, to expand the business.

This will include increasing the company's product range to full line cosmetics and to get BDO's pharmacy and prescription services accredited by the Pharmaceutical Society of NZ.

Beauty Direct says there are only two accredited sites in New Zealand, and they have to comply with strict protocols.

It says future initiatives will include a full range of digital photographic services.

The latest move may be could provide the breakthrough for BDO which has struggled - like all e-retailers - to make its current concept work and got bogged down in a loss-making attempt to expand sales to Australia.

The planned off-market purchase of 7.5 million shares in Beauty Direct for $721,000 values the shares at around 9.6 cents.

Investment company Cube Capital (NZSE: CUB) - formerly Damba Holdings - has 11.4% of BDO which it purchased in March at 8.5 cents per share.

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