Beauty, wellness and education providers Steiner Leisure, which owns brands including Elemis, Mandara Spa and Bliss, has seen its Q4 2014 results decrease 1.4% to $217.8m from $221m during the same period in 2013. However, in addition to this, the company registered a net loss of $185.8m in the quarter, compared with a net income of $13m for the same period in 2013.
The company revealed in a statement that this came primarily as a result of non-cash impairment charges of $212.4m and associated income tax benefit of $14.5m during the quarter related to the “impairment of goodwill, other indefinite lived intangible assets and certain long-lived assets, primarily leasehold improvements at our Ideal Image and Schools reporting units”.
The company explained there had been a change to strategy in terms of services offered at its Ideal Image reporting unit. It stated: “We changed our advertising agency and worked closely with the new agency to refine our message in various forms of digital and alternative media formats to drive consistent and predictable lead flow. We also began to offer new services (including Botox, tattoo removal, skin tightening and body contouring) in order to diversify our business and remain competitive.
"Despite our efforts, during the fourth quarter of 2014, the Ideal Image reporting unit's overall financial performance continued to decline, including having negative cash flows and a decline in actual revenues as compared to our plan. This recent performance has also adversely affected our forecasts of the returns for this business.” It also stated that the performance at its Schools reporting unit was below its “plan”, which hampered projections.
Leonard Fluxman, President and Chief Executive Officer of Steiner Leisure, said: “These impairment charges do not change our perspective about the long-term value inherent to Ideal Image or our Schools, nor does it diminish our long-term enthusiasm for these businesses.”
