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Body Shop on the verge of collapse with 2,200 jobs at risk

By Nithya Bose in Business News, posted February 14, 2024

The Body Shop has fallen into administration, putting more than 2,200 jobs on the line.

This comes shortly after its acquisition by the German private equity firm Aurelius for £207 million in November.

Aurelius could not turn around the company's fortunes following poor sales during the holiday season.

The company appointed FRP Advisory as the administrator, casting uncertainty over the brand's future established by Anita Roddick in 1976.

The brand's UK presence includes nearly 200 stores, a distribution centre, and headquarters.

FRP 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.”

"The administrators are exploring all possible options to salvage the business and plan to keep creditors and employees informed of their progress. "

Recently, Aurelius shut down The Body Shop at Home and divested its European and some Asian stores, which were reportedly underperforming.

While the brand is expected to continue in some capacity, it may operate with significantly fewer stores.

Aurelius might repurchase a downscaled version of the business, focusing on around 100 stores.

However, the administrators consider other interested parties, including potential industry bidders like Next.

Next has a history of incorporating various brands into its retail and online platforms.

Experts suggest that The Body Shop's model may not easily adapt to a wholesale format in other retail settings.

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Its model heavily relies on its ethical sourcing and environmental principles.

This challenge underscores the importance of maintaining a dedicated retail chain to preserve the brand's unique value proposition.

The Body Shop's journey from a single store in Brighton founded by Roddick in 1976 to a global symbol of ethical and sustainable trading has been remarkable.

It was sold to L'Oréal in 2006 and faced ownership changes, including its acquisition by Natura and then Aurelius.

These changes have seen the brand struggle amid competitive and financial pressures.

The administration process marks a pivotal moment for The Body Shop, aiming to secure its future while staying true to its founding ethical principles.

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