Another blow to the British high street, The Body Shop has started the process of filing for administration, putting employment in danger throughout the 200+ UK locations of the business.
The well-known brand presently employs 10,000 workers in its 3,000 locations across more than 70 countries, with an additional 12,000 employees working through franchisees.
The late Dame Anita Roddick founded the business in 1976, and it quickly gained notoriety for its no-nonsense approach to ethical trade and stance against animal testing.
Popular items, including bath bombs, White Musk perfume, and hemp hand cream, contributed to the brand’s success.
However, as competitors Lush and Holland and Barret have grown in prominence, it has lost some of its appeal to UK consumers in recent years.
The business was acquired by private equity firm Aurelius for £207 million a few weeks ago, having previously gone through several owners since being sold to L’Oreal for £675 million by Dame Anita in 2006.
“Despite the challenging retail market, there is an opportunity to re-energise the business to enable it to take advantage of positive trends in the high-growth beauty market,” said Aurelius after acquiring the brand.
It has recently come to light that the company had a bad Christmas trading season and insufficient operating cash.
According to reports, the brand will undergo a major reorganisation with the appointment of restructuring specialist FRP Advisory in the near future.
The Body Shop stated in January that continental Europe and Asia accounted for the majority of their sales.
It told Retail Week: ‘This further prioritises the Body Shop’s strategically important markets and global head franchise partner relationships, which it will look for opportunities to build.
‘The Body Shop will also focus on more effectively reaching customers by strengthening digital platforms, developing new sales channels, and via differentiated retail experiences.’
MailOnline has contacted Aurelius and The Body Shop regarding comments.
A spokesman for The Body Shop said: ‘Today, the Directors of The Body Shop International Limited have appointed Tony Wright, Geoff Rowley, and Alastair Massey of business advisory firm FRP as Joint Administrators of the company, which operates The Body Shop’s UK business.
‘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. The Joint Administrators will now consider all options to find a way forward for the business and will update creditors and employees in due course.
‘The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand relevant to customers and able to compete for the long term. Creating a more nimble and financially stable UK business is an important step in achieving this.
‘The Joint Administrators will continue to trade the business in administration, ensuring customers will be able to continue to shop in-store and online for their favourite products.
‘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. 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.’
How could the new proprietors have been unaware that there wasn’t enough working capital?
Perhaps this was always the goal because they had only recently acquired the firm and would have expected thorough diligence.
Having said that, landlords and the government must realise that high streets cannot thrive without lower rent and rates. They seem to want us all to use our virtual money to make internet purchases.
It appears that The Body Shop went woke, and now it’s broke.
Every time I pass The Body Shop, it’s deserted, and although their items are decent, they’re not great—plus, they cost way too much.
When they originally launched, they could charge whatever they wanted because no one else was selling anything similar. However, now that everyone has jumped on the bandwagon, their counterpart is being sold for less than half as much.
THE MONTHLY MOSQUITO 