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Embattled non-surgical cosmetic chain Body Catalyst has been pulled from the brink after creditors accepted a deed of company arrangement (DOCA) to keep the business operating, although as a slimmed down version of its former self.
Body Catalyst, which had operated 42 clinics prior to being placed into administration last month, will continue to operate 16 clinics after creditors voted on the DOCA yesterday and the remaining 26 entities in the group were placed in liquidation last week.
The Sydney-based group, which had about 200 staff ahead of the administration, has cut its workforce down to 85 to support its operations in NSW, Victoria and Queensland.
Administrators Alan Walker and Glenn Livingstone, of WLP Restructuring, say all staff made redundant during the restructuring process will receive entitlements in full ‘with a return to unsecured creditors to be realised’.
Body Catalyst hit the wall last month with debts of $8.5 million – more than $5 million of that owed to unsecured creditors.
“Since being appointed as administrators, we have focused intently on restructuring Body Catalyst to preserve jobs, maximising the recovery for creditors and ensuring the group remains a going concern,” says Walker.
“While this process led to the unfortunate, but necessary, closure of clinics and related staff redundancies, the vote (by creditors) creates a viable path forward for the group.”
Body Catalyst was founded in 2013 by Samantha Barakat Light with her first clinic in Bondi Junction. That clinic is among the 16 to continue operating as the company emerges from administration.
“The approval of the DOCA not only allows us to begin a new chapter for the business, it’s also a vote of confidence in the restructured group’s future,” says Barakat Light.
“Through this challenging process, I’ve been humbled by the unwavering support of our incredible employees, suppliers, and clients, and I’m beyond grateful.
“We remain committed to our mission and delivering results for clients, and we are excited to continue our journey as leaders in the industry. We can now get back to what we do best - shaping bodies and shapeshifting lives.”
In a LinkedIn post following the creditors vote, Barakat Light reveals that it was ‘heartbreaking’ to close clinics ‘and even tougher for team members whose employment has been affected or uncertain during this process’.
“That’s why it’s important to me that the DOCA allows all employee entitlements to be paid in full,” she says.
“This outcome is not just about surviving. We're back and ready to own the game."
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