Body Shop's UK business slides into bankruptcy
13 Feb 2024 11:03PM (Updated: 14 Feb 2024 11:54AM)
LONDON: The UK arm of The Body Shop, the near 50-year-old cosmetics company renowned for ethical hair and skin products, has entered bankruptcy, administrators said on Tuesday (Feb 13), placing thousands of jobs at risk.
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The retailer has appointed experts from FRP Advisory to oversee administration - a UK process where financial experts are drafted in to try and save parts of a firm.
"Today, the directors of The Body Shop International Limited have appointed Tony Wright, Geoff Rowley, and Alastair Massey of FRP as joint administrators of the company, which operates The Body Shop's UK business," said an FRP statement.
"Taking this approach provides the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalising this iconic British brand."
Administrators will update creditors and employees in due course.
"ICON OF ECO BEAUTY"
German private equity firm Aurelius had bought The Body Shop only in November, but the retailer ran into trouble in a tough economic climate over the key Christmas trading period."The Body Shop failed to scrub out a sales decline, with damp revenues during the crucial festive period pushing an icon of eco beauty into administration," lamented Susannah Streeter, head of money and markets at stockbroker Hargreaves Lansdown.
The Body Shop was founded in 1976 by Anita Roddick and has become a staple of the British high street, but it has been under various owners since she sold it to French cosmetics giant L'Oreal in 2006.
The Body Shop has about 200 shops in the UK, or around seven per cent of its worldwide total of some 3,000 stores in more than 70 countries.
The company directly employs about 10,000 staff, while 12,000 more are employed via franchises.
Roddick, who died in 2007 from a brain haemorrhage, had rapidly expanded the business from modest beginnings with a determination to offer products that had not been tested on animals.
She set out also to make her business environmentally-friendly, with customers encouraged to return empty containers for refilling at the original shop in Brighton, on England's southern coast.
"RIVALS STEAL A MARCH"
"In the 1980s, the Body Shop was the place to go for young shoppers to splash out on fresh scented bubbles and beauty ranges, with a deep environmental conscience and a focus on social justice and conserving nature," added Streeter at Hargreaves Lansdown."But now stores like Lush hold the bigger pocket money draw for tweens and teens, lured in by fragrant bath bombs and innovative product ingredients.
"Rivals have stolen a march on what used to be the Body Shop's unique eco-credentials."
Brazil's Natura Cosmeticos, which had bought The Body Shop from L'Oreal, sold it at the end of last year to Aurelius for £207 million (US$261 million), far less than the previous owners had paid.
Since taking over, Aurelius had already sold The Body Shop business in most of mainland Europe and parts of Asia to an unnamed buyer.
"The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector," administrators added in Tuesday's statement.
"Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop's restructuring."
