Beauty specialist DCI-Artform 'at risk'
today Nov 22, 2019
A loss-making retail solutions firm based in Loughborough is considering its options in a move that could put about 150 roles at risk of redundancy.
DCI-Artform, which offers retail solutions like shop displays for cosmetics brands, said it has been hit by the rise of influencer marketing and the shift towards online shopping.
Staff have been told the company could close in the New Year or significantly downsize its workforce.
Its list of clients include major makeup brands such as Rimmel, L’Oreal, The Body Shop and Lancôme, as well as retailers like Sephora and Boots.
A 45-day consultation will launch later this month to decide on the future of the company, which is owned by US-based Marmon Holdings, part of Warren Buffett’s multinational conglomerate company Berkshire Hathaway.
Revenues at DCI-Artform fell from £31.1 million to £26.3 million in 2018, and dropped by a further 30% this year.
“We are entering a 45-day consultation period and have 150 staff on this site,” managing director David Penn told Business Live.
“There are two scenarios that will play out – a significant restructure and downsizing or, the worst case scenario, a proposal to exit the business. The reality is that this sector is tough.”
The cosmetics sector has experienced significant change in recent times, driven by new technologies and evolving customer behaviours. The traditional role of the beauty counter is also being reviewed by many stores, for example Boots is prioritising discovery areas and Instagram-friendly spaces to entice the younger demographic.
E-commerce has also become a very strong sales channel, and many beauty brands are choosing to invest in digital as a way to build brand awareness and engagement.
Penn continued: “We are heavily focussed on the cosmetics sector, selling into large multi-nationals who are changing their marketing mix – for instance, redirecting their money into Google Ads or into using vloggers.
“We are doing everything we can, but time will tell whether we will have the appropriate options to avoid a closure.”
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