In an unexpected turn of events, one of the UK’s largest skin cosmetic companies went into liquidation in July 2024. The Birmingham firm was known for having the largest collective of specialist skincare clinics in the UK, with over 70 branches across the nation, including 17 locations situated within London. The company was the first to bridge the gap between the NHS and the private sector of private aesthetic treatments, employing more than 450 consultants, doctors, nurses, and medical professionals.
The UK skincare and cosmetic industry, valued at £2.2 billion, ranks 7th largest globally. However, despite its popular services and wide network, the company has faced challenges over the past five years. The company’s rapid expansion, combined with challenges during the COVID-19 pandemic, rising operational costs, and slower consumer spending due to inflationary pressure, had severely impacted its stability.
A fiercely competitive market and the growing remit of health professionals like dentists added to the problems. The company’s rapid growth led to it being acquired from Graphite by a private equity firm Trispan in 2019. The rapid growth resulted in high expenses for advanced laser equipment and substantial rent costs restricted their financial resources.
While the full extent of the issues that led to Sk:n’s closure is unclear, the situation highlights the critical importance of solid supply chain and operations management in the health industry. Effective supply chain management ensures that resources—such as physical clinic locations, and all equipment and medical and general consumables are sourced efficiently, that costs are controlled, and services are maintained without interruption. This is essential to ensure clinics consistently meet demand and operate smoothly and profitably.
Operations management, on the other hand, is centred on optimising the complex internal processes that are crucial to a company’s activities. This included managing the logistics of 70 stores, maintaining the quality of services, and ensuring compliance with healthcare regulations. Without effective management, the complexity of these operations can lead to inefficiencies and poor cost management.
Efficiency in operations can significantly improve the company’s ability to adapt to economic pressure. Most critically, cash management will be severely impacted by poor supply chain and operations management and in the end, the survival of any business always comes down to having robust cash management.
The collapse of this leading company highlights the importance of a good operational foundation and financial planning to deal with overexpansion and market shifts even for industry giants.
As the UK continues to hold a significant position in the global market for skincare, cosmetics companies need to invest in supply chain and operations management to ensure efficiency and cost-effectiveness, and to also ensure resilience in the face of major economic challenges and market shifts.
