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Napoleon Perdis blames 'enormous costs' and economic downturn for makeup shop woes

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Makeup artist Napoleon Perdis has blamed falling foot traffic in his retail stores and rising costs for the need to call in administrators to restructure or sell his business, leaving hundreds of jobs in jeopardy.

Key points:

• Worrells has been appointed administrator to restructure or sell the business
• Napoleon Perdis stores are closed today for stocktake but will reopen tomorrow
• A creditors' meeting will be held within eight days with a second meeting to determine the company's future likely within a month

More than 600 staff are employed by Mr Perdis's eponymous makeup brand, which opened its first store in 1995 and has since expanded to 56 stores across the country.

Solvency and accounting firm Worrells has been appointed as voluntary administrator after the Napoleon Perdis directors failed to sell the business over the course of several months.

Mr Perdis told ABC News there is still demand for the brand through partner stores including Priceline and Terry White chemists, as well as its online store, but said the business must shrink its bricks-and-mortar footprint to ensure it survives.

"For a couple of years now we've been trying to consolidate our retail structure and there's been enormous costs," he said.

Mr Perdis said he was unsure how many staff would lose their jobs but described it as a "family business" that would try to minimise the impact.

"If you estimate that we close 20 to 25 stores, there's three staff per store on average, so close to 100 staff may need to be redeployed, however we're looking to actually see whether we can place them in partner businesses like Priceline," he said.

"It's a huge learning curve. I didn't start out as a boy from Parramatta, as a makeup artist, to create a huge business."

'Business as usual' ahead of creditors meeting

Administrator Worrells said stores are closed today for a stocktake but will reopen on Friday, with no staff stood down at this stage.

"The current plan for the administration process is to see whether the business can be restructured through the process or a buyer is found while the business continues to trade," it said in a statement.

"Worrells will continue to trade all stores as usual and will undertake daily assessments of the stores throughout the administration process."

An initial creditors meeting will be held within eight days, with a second meeting to determine the brand's future expected to be held within a month.

Mr Perdis would not put an number on the magnitude of the business's debts but told the ABC the major creditors are banks and landlords, and that staff owed money would be paid in accordance with the law.

He blamed the rise of social media and online shopping for reducing retail foot traffic and said economic conditions, including homeowners switching from interest-only to principal and interest repayments on their mortgages, have reduced the amount shoppers are willing to spend.

"Less foot traffic, less disposable income, has an impact across shopping," he said.

"I envisage being involved in makeup and with my Australian customers for the rest of my life … I just want the country to make sure it pulls its macroeconomic efforts together so that very few Australians suffer."

Several Australian retailers have entered administration during the past year, including menswear chain Roger David and the local arm of Laura Ashley, amid growing competition from international brands and online retailers.

Multinational makeup giant Sephora expanded into Australia with its first store in Sydney in late-2014.

A report on the cosmetics industry by IBISWorld also found supermarkets and online discount stores have eaten into specialty retailers' sales and described the market as "mature and saturated".

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