Reflexion Cosmetics in talks to buy first company

By Simon Pitman

- Last updated on GMT

Related tags: Company, Trade, Cosmetics

After more than two years of searching for its first move into the
cosmetics business, UK-based Reflexion Cosmetics says it is in
talks for a potential reverse take over.

The company stressed that the talks are still at the earliest stage of their negotiations, and said that the negotiations 'may or may not lead to an offer'.

Company executives were not available for comment on the matter.

The company was suspended from trading on the London Stock Exchange at the beginning of this year because it had not fulfilled requirements as an active company.

The company is aiming to scoop up ailing cosmetic brands or companies in the UK and European markets in an effort to forge its way to becoming a major international cosmetics and personal care retailer.

It has been trying to emulate the success of Premier Foods in the food category. The UK company set about buying up under-performing brands from leading companies such as Unilever and Nestlé and has had a number of successes in turning around brands once thought to be lost forever.

According to a regulatory announcement released in January, the company had losses before taxation for the six months ending July 2005 of £29,000, compared to a loss of £380,000 in the period up to January 2005.

Company chairman Nigel Robertson said in a statement: "During the six month period the company continued to seek trading opportunities. Although a number have been reviewed nothing has as yet come to fruition."

The latest development proves that the company is still actively seeking to get its footing in the industry, but also shows how difficult it is to become established.

As the cosmetics sector is so fast moving, emulating the success of Premier Foods in the food sector has been far more difficult. This is because the cosmetics is more consolidated and dominated by a hand full of major players.

Analysts had tipped Reflexion Cosmetics as being in a good position to capitalise on underperforming cosmetic businesses in the vast UK industry.

From the UK market it was expected that the company would be able to build up a big enough portfolio to allow it to expand into the international market.

The colour cosmetics, hair care and skin care sectors were to be the initial targets, with companies or brands considered to be undervalued and representing good value for money would being of primary focus.

However, after continued studies of the market and lengthy negotiations, the first and all-important acquisition remains elusive, suggesting that market conditions remain far from ideal for the company's ambitions.

Related topics: Business & Financial, Colour Cosmetics

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