May 22, 2024

New Body Shop owner calls UK chain officials | Business News

The chain founded by the late Anita Roddick is preparing to appoint directors next week, putting a huge number of jobs at risk, Sky News has learned.

by Mark Kleinman, City Editor @markkleinmansky

Saturday 10 February 2024 at 06:24 UK time

The new owners of The Body Shop are appointing directors for their British subsidiary just weeks after taking control of the cosmetics retailer, in a move that could threaten large numbers of stores and jobs.

The company founded by Anita Roddick and her husband Gordon nearly half a century ago is preparing to appoint advisory firm FRP to handle the insolvency process for its UK operations, which trade from around 200 stores, Sky News has learned.

City sources said on Friday that officials were likely to eventually consider closing a significant portion of The Body Shop's UK outlets, although they stressed it was too early to speculate on specific numbers.

The Body Shop employs a large number of people in Britain, including its head office in London.

The administrative process for its UK operations will not impact the brand's global franchise partners, according to an insider.

In recent days, The Body Shop's business across most of Europe and parts of Asia has been sold to an unnamed family office.

The retailer told RetailWeek, which first reported on the international deal, that it “is also prioritizing The Body Shop's strategically important markets and key global partner relationships, which it will seek opportunities to build”.

She added: “The Body Shop will also focus on reaching customers more effectively by enhancing digital platforms, developing new sales channels, and through diverse retail experiences.”

“The announced sale is another crucial step towards delivering a strong turnaround strategy for The Body Shop, supported by the right structure.

“The ambition is to create a modern and dynamic beauty brand, relevant to customers and competitive in the long term.”

Aurelius, a private equity firm, acquired The Body Shop in November, in a deal it said was worth £207m.

Retail sector sources said that after completing the deal at the beginning of this year, the new owner concluded that the company did not have sufficient working capital and was trading weaker than expected.

The company has already decided to close its financially struggling Body Shop at Home division, while a report this week named Natura as its previous owner.

The UK insolvency process can allow a smaller, more financially viable business to emerge after its struggles under a series of business owners.

Aurelius was said to have beaten off competition to buy The Body Shop from rival bidders including Alteri Investors, private equity firm Epiris and Elliott Advisors, owner of bookstore Waterstones.

At the time of the acquisition, The Body Shop employed about 10,000 people and operated about 3,000 stores in 70 countries.

Although it has struggled to achieve profitable growth for years, it maintains a prominent presence on the British high street.

The Ruddix family was a prominent advocate for environmental issues, a position that helped it gain an edge over rival retailers during the 1980s and 1990s.

Its opposition to testing cosmetics on animals was also unusual in the decades immediately following its founding.

However, its differentiation has been diminished in recent years by the emergence of competitors who have also put sustainability at the heart of their business while more effectively targeting younger consumers.

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Lady Anita died in 2007.

Natura reportedly paid more than $1 billion to buy The Body Shop in 2017.

It was owned by L'Oreal, the cosmetics giant, before being sold to Natura.

Aurelius and The Body Shop declined to comment.