RIGA - Baltic Cosmetic Holding, a conglomerate of cosmetic shops and beauty parlors recently created, announced last week that it would go public in 2006 after strengthening its position on the market.
Board chairwoman Ieva Plaude told the press that when the Latvia-based holding was established, shareholders, which include the Swedish investment fund East Capital, agreed that it should eventually acquire a listing.
"For BCH to get listed, two things are important: first, financial results must be good, and second is corporate management," said Plaude. "At the moment we are not ready to get a listing this year because the company must learn to work according to stock exchange requirements 's for example, to make the balance sheet by the 10th date every month."
Baltic Cosmetic Holding controls 21 Kolonna cosmetic shops and 40 Kolonna beauty parlors in Latvia, as well as eight Esthetique cosmetic stores. The company also owns 84 Sarma and Saules Uola sales outlets in Lithuania. (Saules Uola cosmetics and perfumery shops will be renamed as Sarma this year.) The holding also has three beauty parlors in Moscow and one store in Estonia.
According to the holding's data, its share of the Latvian and Lithuanian cosmetics and perfume market is approximately 20 percent. Turnover in 2004 amounted to 16 million lats (22.7 million euros), doubling year-on-year, and earnings were 850,000 lats. The holding invested over 1.4 million lats in development, with the same amount planned for this year.
"Such turnover growth is not natural. The growth has been achieved thanks to the takeover of the Lithuanian Sarma chain," said Plaude. She added, however, that while traders expect the average annual sales to grow some 10 percent, those in the cosmetics business are growing 20 percent per year on average.
Still, Latvians and Estonians spend approximately 3.5 times less money on cosmetics annually than people in other EU member states, and Lithuanians spend even 5.8 times less, a survey conducted for Baltic Cosmetic Holding found.
"While in Estonia and Latvia 42 euros are spent on cosmetics per resident annually, and in Lithuania only 25 euros. In other EU member states the average figure is 147 euros," Plaude said, citing the survey.
The survey also found that Latvians generally like to buy cosmetic products at specialized shops, while Lithuanians choose to shop for cosmetic products at supermarkets.
Baltic Cosmetic Holding was founded in October 2004, with 55 percent of the company's shares belonging to Ieva Plaude and an East Capital investment fund owning the rest.
