More trouble for beauty brand Purely Byron, co-founded by Elsa Pataky, after report found it was ‘never profitable’ before collapsing with a $3.6 million loss
- Purely Byron lost $3.6 million
- Elsa Pataky founded it in 2020
- Went into administration on March 10
An administrator’s report has revealed the dire financial situation facing the beauty brand co-founded by Chris Hemsworth’s wife, Elsa Pataky.
The report on Purely Byron, released this week after it went into administration on March 10, revealed that the company had been unprofitable in every year it had been operating.
The company’s directors, Lance Kalish and Ido Leffler, may also be under investigation as they may not be fulfilling their duties.
The report finds that the company has lost about $3.6 million since launching in 2020, with the first product going to market in June last year.
Kalish and Leffler argue that the brand’s financial plight stems from the difficulties of 47 percent majority shareholder, BWX, which provided just $3.9 million of the promised $8 million in funding to create Purely Byron.
The report also showed that the company may have continued to trade between filing for bankruptcy and appointing administrators, although further investigation is needed to confirm whether this was the case.
An admin report on the Beauty brand, Purely Byron (pictured), found that the company was never profitable and lost $3.6 million since its inception in 2020
Although named in the report as a co-founder, Ms. Pataky was not on the board of directors, meaning her agreement was purely an “endorsement and partnership agreement.”
Purely Byron sold a range of skin care products inspired by the ‘raw beauty’ of the northern NSW beach town and featuring ‘clinically proven actives and formulas’.
The company’s directors wrote in the report that “BWX has experienced material financial complications over the past 12 months and as a result, the board has publicly stated that it intends to sell all of its non-core investments, including Purely Byron.”
BWX had bled $336 million during the 2021-2022 fiscal year.
The beauty conglomerate’s losses continued with another $100 million loss in the first half of its current fiscal year, prompting then-CEO Rory Gration to step down.
The report said that in response to Purely Byron’s nearly $3 million shortfall, the directors could be “in violation” of section 180 of the Corporations Act.
The section says directors must “exercise their powers and perform their duties with the degree of care and diligence that a reasonable person would exercise.”
Though credited as a co-founder, actress Elsa Pataky — aka Chris Hemsworth’s wife (both pictured) — was first and foremost a brand ambassador for the company
Mr Leffler told The Age and The Sydney Morning Herald that the report made no mention of any misconduct on behalf of the directors.
They deny allegations that they may have violated their duties as directors.
“The creditors’ report accurately reflects the situation, which is unfortunate,” Leffler said.
“We are waiting to see what the outcome (is) of some interested parties with which the administrators are in talks.”
It’s not certain what creditors will do with the company’s direction, but it has received some interest from potential ‘white knights’ to buy BWX’s shares.
Dr. Vivek Eranki, the CEO of botox company Cosmetique, expressed interest in acquiring Purely Byron.
Dr. Eranki said the company was now looking to expand into skincare, with the majority of its customers being women between the ages of 18 and 35.
“The vast majority of our customers have some kind of skin care routine and from a commercial standpoint we don’t have a footprint in this space at the moment,” he told Daily Mail Australia in March.