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Oriflame to sell UK & Ireland operation to PDG

Dec '05
International cosmetic retailer Oriflame Cosmetics has signed a Heads of Agreement to sell Oriflame UK Ltd (OUK), the company in which the Group conducts all its UK and Ireland sales operations to Premier Direct Group plc (PDG).

PDG will continue Oriflame sales operations in these countries.

Under the terms of the contract, Oriflame shall be liable for all costs associated with the transfer and assume the outstanding pension liabilities.

The cost of this to Oriflame will be approximately € 4m which will be recognised in the results for 2005.

As previously reported, Oriflame's UK operation has been loss making for many years.

Oriflame had operating losses of € 1.8m on sales of € 4.9m in 2004 and expect to make a loss of € 1.8m on sales of € 4.3m for 2005.

The agreement stipulates that PDG will operate OUK on a franchise basis effective from 1st January 2006 and will thus market and sell products and catalogues supplied by Oriflame through direct sales.

Oriflame expect this arrangement to result in a breakeven for itself for the following three years.

PDG is a leading nationwide shopping-at-work provider based in Newcastle.

Products are sold directly to its customers by independent distributors.

Oriflame Cosmetics is an international cosmetics company selling direct, with sales in 56 countries.

Oriflame offers a complete range of high quality skincare, fragrances and colour cosmetics, marketed through independent Sales Consultants.

Although the company has grown rapidly it never lost sight of its original business concept - natural Swedish cosmetics, sold from friend to friend. Oriflame is a co-founder of World Childhood Foundation.

Oriflame Cosmetics

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