RE:RE:RE:What are we getting for $650,000?kidl2 wrote:
The cosmetic / beauty industry is an absolute “dog eats dog” business and it’s dominated by REALLY big dogs.
Developing a cosmetic label into something meaningful costs millions and the failure rate is probably on par with the fashion or restaurant business. 9 out of 10 go bust.
I know this first hand as a good friend of mine was in the cosmetic wholesale / distribution business for some 30 years.
CZO just bought itself a bottomless pit.
kidl2, I think you are spot on with your analysis and the market has also agreed. Ceapro is not a marketing company nor is it even remotely close to be regarded as having any brand awareness. To now dip their toes into the end-user cosmetic retail sector is pure madness at this stage of the company's growth and the significant level of marketing dollars required to even compete with the big dogs will suck any near-term and mid-term profitability and cash flow.
My thoughts are Ceapro should have just accepted that BG is a commoditized but stable business and keep it running to provide a foundational base level. Use that stability to buy you dollars/time to conduct and finish trials for their development pipeline into other markets such as nutritional drinks and FDA approved cholesterol lowering product (which they have been doing). Then it is with the commercialization and release of these new products into new sectors that will be the highly valued growth drivers.
Somewhere along the path this year it appears management has lost patience or lost faith in their vision, and now attempting to stir things up with something different instead of waiting for one more year of pipeline development. I think this is a fairly significant blunder, though IMHO ...