Just On Cosmetics is to be wound up, East London High Court Judge Lusindiso Pakade ruled last week.
Last month the Daily Dispatch reported that 500 employees of Just On Cosmetics were sent home when 43 stores shut their doors.
Craig Hanafey, the managing and sole director of Just On Cosmetics, in court papers said the company was unable to pay its debts and was insolvent because it could not pay from its own resources.
The company was started by Mike Naidoo more than 20 years ago and Hanafey had been involved with the business for six years.
Hanafey detailed the company’s finances from 2011 when it made a trading profit of R23-million for the 2011 financial year. Things had, however, gone bad from there.
He said in 2011 there were attempts to expand the business and the National Empowerment Fund was approached to grant a loan of R50-million.
According to Hanafey, intensive investigation and research found Just On Cosmetics required a change in its merchandise management system.
It was decided that a new system would be installed in all stores and the process started in January 2012.
It was abandoned when Just On elected to purchase an off-the-shelf product. The new system was to be installed by June 2012, but was not.
During that period, Hanafey says, the Naidoo family purchased a Johannesburg-operated business called Charlie Parker, comprising 10 stores for R7-million.
Hanafey said the purchase, together with the implementation of the new merchandise management system, proved to be “catastrophic”.
He said a 20% gross profit was projected but in reality Just On was operating at a gross profit margin on sales of 12%.
The net effect was that instead of making a R10-million profit, Just On suffered a R40-million loss. — siyab@dispatch.co.za
Court shuts Just On Cosmetics
Last month the Daily Dispatch reported that 500 employees of Just On Cosmetics were sent home when 43 stores shut their doors.
Craig Hanafey, the managing and sole director of Just On Cosmetics, in court papers said the company was unable to pay its debts and was insolvent because it could not pay from its own resources.
The company was started by Mike Naidoo more than 20 years ago and Hanafey had been involved with the business for six years.
Hanafey detailed the company’s finances from 2011 when it made a trading profit of R23-million for the 2011 financial year. Things had, however, gone bad from there.
He said in 2011 there were attempts to expand the business and the National Empowerment Fund was approached to grant a loan of R50-million.
According to Hanafey, intensive investigation and research found Just On Cosmetics required a change in its merchandise management system.
It was decided that a new system would be installed in all stores and the process started in January 2012.
It was abandoned when Just On elected to purchase an off-the-shelf product. The new system was to be installed by June 2012, but was not.
During that period, Hanafey says, the Naidoo family purchased a Johannesburg-operated business called Charlie Parker, comprising 10 stores for R7-million.
Hanafey said the purchase, together with the implementation of the new merchandise management system, proved to be “catastrophic”.
He said a 20% gross profit was projected but in reality Just On was operating at a gross profit margin on sales of 12%.
The net effect was that instead of making a R10-million profit, Just On suffered a R40-million loss. — siyab@dispatch.co.za
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