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Author: TK7 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121  
Subject: Competitors? Discontinued Products? Date: 10/3/2008 1:46 AM
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Why did Bare Escentuals decide to focus more on make-up? I know many people who loved using their lotions. Was it a decision based on brand identity or sales?

Also, Glominerals is rising. Their products are supposedly superior (Much finer. Milled 3 times compared to Bare Escentuals who mills only once). Their prices are almost the same.

The majority of people I've talked to use Bare Escentuals. Of the people who don't use Bare Escentuals, they use Glominerals. All of the Bare Escentual users I've talked to have never heard of Glominerals.

This is worrisome because they might be future converts?

I was looking into buying BARE today, but with all these questions about BARE's marketing plan and the increasing amount of competition, I may have to do some more research and/or limit myself to a small position.

My girlfriend is a Bare Escentuals user. She claims it's better than everyday and sheer minerals. She has yet to try glominerals. I'll have to provide an update when I buy her some.

What do you fellow fools think?
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Author: rwandamassacre Two stars, 250 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 118 of 121
Subject: Re: Competitors? Discontinued Products? Date: 11/2/2008 11:08 PM
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This stock is a complete dog. Private equity investors loaded it up with debt to pay themselves huge dividends and then sold the empty carcass to sucker public investors:

"The case of San-Francisco's Bare Escentuals Inc. (BARE ) shows how reliant firms have become on public stock investors. In 2005 the cosmetics maker took on $412 million in debt, mostly to pay its owners, Boston's Berkshire Partners and San Francisco's JH Partners, a total of $309 million in dividends and "transaction fees" in two installments eight months apart. The payments were a stretch for a company that earned only $24 million in 2005. In September, 2005, Standard & Poor's revised its outlook for the company to "negative" from "stable," citing its "very aggressive financial policy."

Yet Bare Escentuals' owners, who bought the company in June, 2004, kept coming back to the trough. In June, 2006, despite S&P's decision in May to lower the company's credit rating from to B to B- and the company's soaring debt-payoff costs, Bare Escentuals began to borrow again to pay its owners even larger amounts: a $340 million dividend, $218,00 in management fees, and $1.8 million in stock for arranging the dividend.

On Sept. 29, investors picked up the tab through an IPO. Most of the money raised was used to repay debt, except for $1.8 million that went to the owners "as consideration for the termination of our management agreements with them." Bare Escentuals and its owners declined to comment on the payments."

http://www.businessweek.com/magazine/content/06_44/b4007001....

Randy

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Author: BShaw010 Big red star, 1000 posts Old School Fool Ticker Guide CAPS All Star Mission Olympia 2 SC1 Red SN Explorer 1 Mission Team Member Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119 of 121
Subject: Re: Competitors? Discontinued Products? Date: 11/3/2008 12:09 PM
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Way to find three year old news that is completely out of date :-).

Just kidding. That article did in fact foreshadow the approximately 90% drop in stock price that has happened since then. I agreed at that time that the stock was completely overvalued after having that much debt dumped on the books.

I'd argue that today is a different story though. The company continues to grow despite increased competition and overall economic conditions. The current valuation is ridiculously cheap based on just about any of the standard metrics (P/E, PEG, DCF, etc...). At less than $5, this company is priced like it is going to go out of business. The debt is still an issue, but the company is generating good (and improving) free cash flow which will help cover the debt over time.

The key to me is that the business model hasn't changed. The company continues to open new stores, and at least near me the stores are packed with loyal customers (haha, including my wife) that swear by the products.

Based on the company's valuation, recent performance and planned growth, I personally think we'll see the stock price back at $30 in 3-5 years rather than at $0. If you are looking at today's prices as an entry point, $4-$5 is very cheap for what this company has to offer; a simple recovery back to the company's 52 week high would yield a multi-bagger that anyone would be happy with.

Just my two cents...


Brian

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Author: a07843 Three stars, 500 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 120 of 121
Subject: Re: Competitors? Discontinued Products? Date: 11/25/2009 8:48 AM
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Brian,

Hello. Agreed. I think some of the posters and even some of the TMF'ers don't understand Bare Escentuals or the cosmetics industry. There has been a few very negative opinion pieces from the Fools. These opinion pieces didn't seem to cover the debt repayment. Last I looked the company was trying to pay down its debt every quarter, which is a good sign.

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