Friday, February 23, 2024

The Body Shop UK is plunged into administration with troubled ethical beauty chain’s 200 stores now at risk: Owners Aurelius take drastic action to cut costs in bid to take on the likes of Lush after brand suffered poor Christmas sales

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The Body Shop has entered administration with jobs at risk across the brand’s 200-plus UK stores.

The beloved chain currently employs 10,000 people across 3,000 stores it operates in more than 70 countries around the world – with a further 12,000 staff working in franchises. 

FRP Advisory has been brought in to handle the insolvency process just weeks after a new owner took control having vowed to ‘re-energise the business’. The administration currently only affects UK staff and stores.

In a statement, it said ‘administrators will now consider all options to find a way forward for the business and will update creditors and employees in due course’.

The business will continue to trade both in-store and online while plans are made for the future of the beloved high street brand. 

The Body Shop has begun the process of filing for administration with job losses a risk

The Body Shop, the near 50-year-old cosmetics company renowned for its ethical hair and skin products, is struggling financially in the UK

The Body Shop, the near 50-year-old cosmetics company renowned for its ethical hair and skin products, is struggling financially in the UK

The Body Shop was sold to L'Oreal for £675million by founder Dame Anita Roddick in 2006

The Body Shop was sold to L’Oreal for £675million by founder Dame Anita Roddick in 2006

The troubled chain – which has faced stiff competition from the likes of millennial and Gen Z-friendly bath bomb purveyors Lush and luxury brand Rituals – had also just shut down its Avon-style home business division, The Body Shop At Home.

FRP said: ‘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.’

The administrators added: ‘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.’

As well as threatening thousands of jobs, the news could spell trouble for the many suppliers of Body Shop goods across the globe, who have been sourced carefully by the ethically minded firm over decades.

While administration does not necessarily spell the end of the British brand, social media is full of reaction from those who fear the worst for the beleaguered firm. 

One former worker recalled on X, formerly Twitter: ‘Sad news about The Body Shop. Still one of my fave jobs ever when I was a student, worked weekends Oxford St & Kings Rd in late 90s.

‘Met some amazing people (cool celebs too) & fell in love with skincare & makeup.’

Another simply said: ‘The body shop is shutting down this is the worst day of my life’; one Londoner wrote: ‘If the body shop in centre court (Centre Court Shopping Centre in Wimbledon) goes I will actually cry.’ 

Set up in 1976 by the late Dame Anita Roddick, the company became famous for it’s no-nonsense ethical trading ethos and refusal to test products on animals. 

Popular products which helped establish the brand’s name included bath bombs, White Musk fragrance and hemp hand cream.

There has been an outcry on social media in response to the news of The Body Shop entering administration

There has been an outcry on social media in response to the news of The Body Shop entering administration

The store grew into an eco-friendly, socially responsible, politically outspoken chain of 1,700 shops, operating in 49 markets around the world. Dame Anita is pictured above in 1984

The store grew into an eco-friendly, socially responsible, politically outspoken chain of 1,700 shops, operating in 49 markets around the world. Dame Anita is pictured above in 1984

Protesting against animal testing was a key business objective for the brand, with Anita leading the resistance

Protesting against animal testing was a key business objective for the brand, with Anita leading the resistance  

Redefining beauty standards was another key aim for The Body Shop, with the objective of making women feel comfortable in their own skin

Redefining beauty standards was another key aim for The Body Shop, with the objective of making women feel comfortable in their own skin 

In 2012, British actress and model Lily Cole (pictured) became the brand's first global ambassador

In 2012, British actress and model Lily Cole (pictured) became the brand’s first global ambassador 

However in recent years it has seen its popularity in the UK with shoppers diminish due to the rise of rivals Lush and Holland and Barrett, and a growing online market of cheaper alternatives.

The firm also fell out of favour with some buyers after being sold to L’Oreal for £675million by Dame Anita in 2006 – a move that stunned many who saw the sale to a large corporation as running counter to the company’s values.

Since then The Body Shop has changed hands several times, before being bought by private equity firm Aurelius just weeks ago for £207million. 

After purchasing the brand, Aurelius said that ‘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.’ 

It has since emerged that the business has insufficient working capital and suffered from a poor Christmas period of trading. 

In January, the Body Shop claimed that most of its business stemmed from mainland Europe and Asia – and has since sold those businesses to an unnamed investor.

It told Retail Week in January that the move ‘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 approached The Body Shop and Aurelius for comment. 

Anita Roddick: High Street pioneer who built £51m fortune then gave it all away before she died 

Founder Dame Anita Roddick pictured in 1984

Founder Dame Anita Roddick pictured in 1984

Founded in 1976, The Body Shop was one of the first cosmetics companies to prohibit the use of ingredients tested on animals and to promote fair trade with developing countries.

This was in large part to its founder, Dame Anita Roddick, who was a human rights activist and environmental campaigner.

She was an avid campaigner for environmental and social issues, including involvement with Greenpeace and The Big Issue.

In 1990, she founded a charity called Children on the Edge, which helped disadvantaged children in Eastern Europe, Africa and Asia.

She founded The Body shop to earn an income for her and her two daughters while her husband was away in South America. Upon her husband’s return, he joined the business.

By 2004, The Body Shop has 1980 stores, more than 77 million customers and was voted the second most-trusted brand in the UK – ad the 28th top brand in the world.

But that same year, Roddick was diagnosed with liver cirrhosis due to hepatitis C. She didn’t reveal this until 2007. 

She was an avid campaigner for environmental and social issues, including involvement with Greenpeace and The Big Issue

She was an avid campaigner for environmental and social issues, including involvement with Greenpeace and The Big Issue

She announced it by saying: ‘I have hepatitis C. It’s a bit of a bummer, but you groan and move on.’

Subsequently she promoted the work of the Hepatitis C Trust and raised awareness for the disease.

Roddick was said to believe she became infected with Hepatitis following a blood transfusion after the birth of her younger daughter. This was twenty years before the UK screened blood donors for the disease.

She tragically died of an acute brain haemorrhage in September 2007. Earlier, she had sworn to leave her fortune to charities rather than her families and friends – a promise she remained true to.

The businesswoman was always adamant she had no intention of ‘dying rich’ and her Will revealed she had given away her entire £15million fortune to charity before she died.

When she died, the gross value of her estate was £665,747 which was swallowed up by inheritance tax, leaving her net worth at nil.

She had previously described leaving money to your family as ‘obscene’ and cut her daughters Sam and Justine out of her will in 2005, which Sam called a ‘relief’. 

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