More than a decade after launching its cosmetics empire in Singapore, Saha Cosmetics has seen its share of trouble.
Now, the brand’s parent company is warning that its cosmetics business could be at risk after it posted a loss of almost $1.2 billion in the first quarter of 2019.
“The company was a global leader in cosmetics and cosmetics brands in the Asian market, but in recent years we have experienced challenges in the Asia Pacific region,” Saha chief executive, Sohail Jauhari, said in a statement.
“This has impacted the business in the region, which is why we have decided to take steps to improve the business and provide additional cash flow.”
In its statement, Soho said it would cut more than 1,000 jobs across its cosmetics operations by the end of 2019, including 350 jobs in Singapore.
The company also said it had lost $1 billion in total revenue since the start of the year.
Saha, founded in 2009, was Singapore’s first and only cosmetics brand.
Its flagship brand, Aveda, now owns 80% of the cosmetics business.
Avedas sales rose 12% in the year to March, and its share in the overall cosmetics market is now about 30%.
Saha is the only Singapore-based cosmetics company to have reported an operating loss for the first half of 2019 and is the subject of an investigation by the Australian Competition and Consumer Commission, a spokeswoman for the watchdog said.
The ACCC is also investigating a complaint lodged against Saha over its pricing practices.
Soho declined to comment on whether it is being investigated by the ACCC.
Sohaira’s chief financial officer, Ravi Prasad, said the company has not made any changes to the strategy or the business since the company’s initial public offering in May 2018.
“We are currently working on our financial plans, but we are focusing on providing additional cashflow to our business and on improving the quality of our products and services,” he said.
SOHAIRA has made a series of changes since the IPO, including cutting around 600 jobs.
It has been expanding its business by adding the Asian Beauty Company, which aims to attract brands like Avedis to Singapore.
Sollars sales in Singapore grew by almost 20% in 2020 to $7.7 billion.
The brand, which also owns other beauty brands like L’Oréal, K-beauty, and NARS, has also invested heavily in its Singapore operations.
It launched the first-ever cosmetics factory in Singapore in April 2020, but its new Singapore factory has been a slow-start.
The factory, in the city of Singapore, has not yet launched a new product line.
“As the first ever cosmetics factory and the first cosmetics brand in Singapore and also the world, we feel the importance of the business,” said Prasud.
The first-of-its-kind factory will open in 2021 and the factory will produce up to 10,000 cosmetic products annually.
“Our goal is to expand our cosmetics business to 100 million units annually and we have a long way to go,” he added.
“It is our ambition to produce 100 million products a year by 2022.”
The ACCc investigation is still ongoing and is looking into whether the company is being misleading consumers about the quality and safety of its products.
The investigation also is looking at whether Sohaidas business model has a pattern of misrepresentation.
The firm has also been accused of using misleading advertising, which could amount to deceptive conduct.
Saharis revenue increased by 5% in 2021 to $5.6 billion.
Its share in Singapore’s cosmetics market rose from 20% to 29% in that same period.
However, Sahairas share of the global cosmetics market in the same period fell from 17% to 17.6%.
It had more than doubled from 4.3% in 2017 to 12.3%.
Sohaias chief executive has also come under fire for his company’s management style.
Sohaib Shah, the chief operating officer of the brand, has been the subject the ACCc’s investigation.
Last year, the ACC, a United Nations body, accused Sohairas management of being overly demanding and not giving its employees a fair shake.
Sohaaira said in its statement that it was aware of the concerns raised by the regulator. “
In the early stages of the investigation, we observed that some employees were treated more harshly than others, leading to some employees feeling intimidated and in some cases being forced to take leave to support their families.”
Sohaaira said in its statement that it was aware of the concerns raised by the regulator.
It also said its managers are currently considering all the relevant facts and circumstances.
“Saha Cosmetic Holdings will not tolerate any