While the vast majority of us might shirk at the idea – and cost – of an intensive bout of plastic surgery to hold back the years, most of us don’t really bat an eyelid when it comes to buying over-the-counter products which promise to revitalise our looks and lives.

The list of cosmetics now available for women (and increasingly men) is nothing short of incredible. From miraculous moisturisers, anti-wrinkle creams and under-eye treatments to rejuvenating night lotions, exfoliating solutions, advanced hydration day fluids and body salves – if you think you need to treat it, rub it, revive it or re-invigorate it, there’s a potion for you. And it’s a similar tale if you need a product that will zap, shave or laser a troublesome zone of your body.

Those in the know call this the ‘prestige beauty market’ and in 2005 the global market for such products was estimated to be worth $40 billion. In Western Europe alone the industry is reckoned to be worth in excess of $14 billion and more than $3 billion in the UK.

As you might expect, this is a dynamic, fast changing and fragmented industry. But the margins and profits on offer for those that succeed in building their brands are remarkable.

Beauty really is skin deep!
One particularly small venture with big ambitions is Chromogenex, a manufacturer and distributor of cosmetic laser devices for problems such as eczema, dermatitis, psoriasis, acne and unwanted hair.

Its chief product is Chromolite, a high-tech treatment that employs a broad spectrum of light energy in a range of wavelengths to produce high levels of power in millisecond bursts. With each burst applied to the skin, the intense pulsed light energy penetrates the sub-surface skin layers and permanently removes hair and, interestingly, allegedly engenders ‘skin rejuvenation’.

After the group received FDA approval in the USA for Chromolite in January, the company saw a 79 per cent rise in sales, all of which helped deliver interim figures to June showing profits of £236,000 (£56,000) – a leap of 321 per cent – on revenues increased 41 per cent to £2.07 million.

Like any sensible AIM company in this space, Chromogenex has more than one product on offer. Its other device is known as Nlite-V. This, the group claims, has the ability ‘to eliminate laughter lines, crow's feet and generally combat the signs of ageing’. What’s more, Nlite has apparently demonstrated that it can help acne sufferers and assist those that suffer from facial and bodily scarring.

Whilst current treatments can be harsh and leave the skin looking red and blotchy, the group says Nlite is pain-free, ‘has minimal side effects’ and treatments can take as little as 30 minutes. Like its sister product, it is a hand-held device that directs energy to the affected area.

If Nlite-V receives regulatory approval in the US, sales growth could follow that of Chromolite in so-called ‘medispas’ – approachable clinics that constitute a move away from specialist Harley Streetesque doctor’s offices – a growing market given the current taste for pain-free cosmetic procedures.

‘It seems,’ says executive chairman Peter McGuinness, ‘that the number of surgical face-lifts has declined for the first time in a number of years, illustrating the trend away from more invasive treatments to those of a more subtle nature.’

Fuelled by the media, the growing number of ‘baby boomers’ with money to burn are eager to maintain a youthful façade.

Skin spas the order of the day
McGuinness is also managing director of Plus-listed ‘medispa’ operator Skin Health Spa, which provides non-invasive cosmetic treatment services for ageing skin, acne and scar formation, hair removal and wrinkles in five clinics, including one in Selfridges. He says that the company is hoping to expand by acquisition and increase that number to nine next year and 20 in the next 18 months.

Recent interim figures to April showed turnover of £1.2 million, but losses of £218,000. This obviously disappointing performance was due to lower than expected profitability at the recently acquired BriteSmile division – a teeth whitening devices outfit also using light energy – and losses at the Selfridges store. According to management, its Birmingham store achieved a like-for-like increase in sales and a vastly improved net profit. By the end of July, there was ‘a significant improvement in sales and profitability at Selfridges’.

Both of the above companies also received a boon from recent reports that pharmaceuticals giant Roche’s Roaccutane treatment for severe acne might be linked to depression. The drug has reportedly been connected to more than a hundred actual and attempted suicides throughout the world, although it’s worth noting that the manufacturer denies any link, saying that the condition itself could be to blame. Whatever the truth, non-invasive and apparently safe alternatives to the drugs on offer for acne treatment are likely to prove appealing – provided they work, of course.

Corsie’s skin deep plans
Another fledgling offering of note is Corsie Group. Former world singles bowls champion Richard Corsie founded this business in 1997 after he retired from the sport and operates from its headquarters in Musselburgh, near Edinburgh.

Corsie took over the company with a view to slimming overheads and utility costs through a consolidation of its seven premises into the current two, and focusing on the spa leisure niche.

The group only joined AIM in June and is pursuing an acquisitive strategy to add to its core business – the supply of ‘quality consumables’, including hair treatments, moisturisers and skin cleansers to spas in the UK and Ireland.

In addition, it has recently launched an online shop, shopspa.co.uk, which offers luxury beauty products direct to the consumer.

Maiden interim figures showed a profit before tax of £102,000 (without exceptional items) on turnover up a modest 7.8 per cent at £1.93 million (£1.78 million). Earnings per share amounted to 0.01p.

According to Corsie, the market is robust and growing, but remains fragmented and would be helped by a bout of consolidation. Corsie has been doing its bit, recently completing the acquisition of Kaloss International, a distributor and wholesaler of health and beauty products, for a cash consideration of £434,000.

For the year to March 2006, Kaloss delivered gross profits of £804,000 on revenues of £1.4 million. David Mathewson, chairman of Corsie Group, has billed it as ‘an exciting bolt-on opportunity’ for the £6 million group.

Franchised attractions
Faces Cosmetics was formed in August 2006 as the holding company of Faces Holdings, a Canadian branded cosmetics, skincare and anti-ageing products business.

The business operates stores on a franchise model, taking a cut of sales revenues and royalty payments, while selling its beauty products, for men and women, wholesale to franchisees. Treatments such as facials, manicures and waxing are provided at its 54 retail outlets in the US, Canada and Mexico.

It joined AIM at the start of September following a £1.2 million private fundraising. According to chief executive Ramesh Jolly, the reason for listing in the UK was to raise the Faces’ UK profile ahead of a planned expansion in this direction.

Jolly is planning to open a wholly owned ‘flagship’ store in the UK followed by further franchises, and 11 more franchise stores throughout the US over the next two years.
The company has employed entertainer and business adviser Patti Boulaye, the face of Lux beauty soap for many years, to advise on the best way of penetrating the UK market. With a market capitalisation of £6.63 million at the current 13p and revenues of around £2.23 million in 2005, the move could prove beneficial for Faces, but a firm set of interim figures will clarify its position and progress.

Blue-chip management
If you’re after management with an international track record in this space, take a look at The Core Business.

Run by chief executive Stirling Murray, a former director of Rimmel International and Estée Lauder, it was set up to develop, launch and distribute personal care brands and products from make-up and skincare to men’s grooming and hair care.

Murray’s brand-building expertise was last seen at make-up concern Bourjois; between 1998 and 2002, while he was a director, turnover grew from over £16 million to over £22 million.

At Core he is adopting an acquisitive strategy, focusing on personal care and beauty brands, to support the organic growth in the distribution business. This arm is ‘expected to generate cashflow and the development of owned and licensed brands should provide capital growth,’ says Murray.

While financial figures are hard to come by at this stage, a degree of progress is being made. Since being admitted to AIM in March, Core has won five new consultancy projects, including a contract with a ‘major blue-chip retailer’, and launched a new sun care brand called Blockhead. It has also won a licensing agreement from house music group Ministry of Sound (MOS) to develop a range of personal care products for its music, entertainment and ‘lifestyle’ brands – Ministry of Sound and Hed Kandi. MOS has since exercised its option to subscribe for two million shares in Core, ‘a powerful endorsement of the company,’ says Murray.

Ministry of Sound is big in the youth market, and the affiliation could be a fillip to Core’s business.