£17.4m-turnover cosmetics brand acquired out of administration for £1.4m

Value cosmetics brand Barry M has been acquired out of administration by cosmetics group Warpaint London. The group has paid £1.4 million to acquire Barry M’s IP, stock and order book, with the deal excluding its manufacturing capabilities and liabilities.

Barry M is a London-based ethical beauty products manufacturer, with retail partners including Boots and Superdrug. Founded in the 1970s, the company had grown to become a prominent brand on high street shelves, with stands in over 1,300 stores.

In the year to the end of February 2024, the company reported turnover of £17.4 million, up from approximately £15 million a year earlier, while pre-tax profits increased from roughly £37,000 to slightly over £172,000. Fixed assets were valued at £2.3 million and current assets at £10.6 million, with net assets totalling £6.7 million.

However, the company warned at the time that it was being impacted by “geopolitical issues”. Despite undergoing a significant rebranding last year, the company continued to face mounting pressure and recently filed a notice of intention to appoint administrators.

Subject to court approval, administrators from Begbies Traynor have now secured a sale of the business to listed cosmetics group Warpaint London, owner of brands including Super Facialist, Fish Soho, Dirty Works, W7, Skin & Tan and Technic.

Warpaint London Chief Executive Sam Bazini said that the acquisition of the Barry M brand is “expected to accelerate our penetration into key UK retail channels.”

The acquisition was announced alongside a trading update for the year, in which the Buckinghamshire-headquartered group forecast revenues of £105 million for the year ending December 31 2025, up by 3 per cent from the previous year.

However, underlining the challenging trading conditions the sector faces, the group forecast a 12 per cent drop in EBITDA to £22 million. The group's performance was said to have been hit by the closure of a major client, Bodycare, business lost as a result of US tariff uncertainty and the overall “challenging consumer and customer environment"

Sam Bazini commented: "Looking ahead to the new year, we expect to see a return to organic growth across the group and also expect to be able to update the market on further significant new customer rollouts with our full year results in April.”

Despite Warpaint’s results being impacted by a “very challenging macroeconomic environment”, Bazini added, the firm “were pleased with the progress made in many areas of the group”, particularly the new Brand Architekts business, which delivered a profit.

He continued: "Across the group, we remain very well positioned for the future, with a focus on achieving additional improvements in margins and further rollouts to new retail outlets."

Acquisitions of intellectual property assets can deliver huge value, but there are a number of critical due diligence considerations that buyers should bear in mind

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