From cult status to closure fears – what happened to The Body Shop?
It’s a store you know by smell.
For decades, the sometimes overpowering scent of Satsuma soap and coconut body butter from The Body Shop has wafted through the halls of malls, as much a staple of the culture as the food court.
The UK-based beauty and cosmetics retailer has more than 3,000 retail locations in 70 countries, including 110 standalone stores in Canada. In the 1990s and early 2000s, the store became operational state of worship With teens and young adults looking for natural ingredients I swear by their tea tree oil line.
But only a few weeks after The Body Shop International debuted It was received By private equity firm Aurelius Investment, the company is said to be… Appointment of administratorsIt’s a move that would likely lead to job losses and store closures in the UK – although it’s not yet clear whether stores in Canada will be affected.
Put the company into administration If she cannot pay her debts, it protects her from legal action or creditors.
This step is fairly typical when a private equity firm takes ownership A company needs to turn a profit and cut losses in a very short period of time, Kai Lee, a professor of finance at the University of British Columbia’s Sauder Business School and Canada Research Chair in Corporate Governance, told CBC News.
In addition, she said the economic impacts of Brexit are starting to spill over into the UK retail market.
“This is a weak market for them, so they’re just cutting their losses,” Lee said. “A much-loved brand is now sadly on the verge of being cut up.”
CBC News reached out to Aurelius and The Body Shop for comment, but had not received a response at the time of publication.
according to Sky Newswhich first reported the appointment of administrators, said the administration process for The Body Shop’s UK operations “will not impact the brand’s global franchise partners”.
Period of weak sales: report
Sky News reported that Aurelius is allegedly lining up restructuring expert FRP Advisory to manage the insolvency process. This comes after a weak period of trading during the Christmas holidays and January, he said Media reports.
The news was condemned by fans of the store, including British actor Adjoa Andoh Bridgerton.
I’m heartbroken by the demise of The Body Shop, for its body butter, cosmetics range, ethical value system, and solidarity with communities around the world who grow ingredients. I have been a regular shopper at The Body Shop since the 1970s. I am deprived😳. Thank you Anita… pic.twitter.com/ho1sS7ZJwc
“I was heartbroken by the demise of The Body Shop, because of the body butter, the range of cosmetics, the ethical value system, and the solidarity with communities around the world who grow ingredients. I have been shopping continuously at The Body Shop since the 1970s. I am deprived of that. ,” the actor Written on XOfficially known as Twitter.
Other users described the store as “revolutionary” because of its greener, ethical approach to business. The beauty brand has campaigned for decades against animal testing in cosmetics.
British writer Zoe Williams wrote in The Guardian on Monday that… We will mourn the body shopWhich she describes as “a gateway to politics for animal-obsessed teens like me.”
The Body Shop was founded in 1976 in Brighton, England, by Anita Roddick. I focused on offering skincare, bodycare, haircare and makeup products that were inspired by nature and ethically and sustainably produced at a time when these practices were not yet mainstream.
Roddick died in 2007 at the age of 64.
“Bringing a pre-digital revolution, Anita Roddick and The Body Shop were brave, instinctive, and cannot be ignored,” British MP Peter Kyle wrote on Monday.
The brand expanded for the first time in Canada in 1980Today it has about 110 independent stores. In 2004, The Body Shop Canada sold itself to its UK parent company, Body Shop International, for approximately $26 million.
In 2006, the company joined the L’Oreal Group, then in 2017 it joined the Brazilian company Natura & Co. In December, the company was acquired by Aurelius Group.
“Despite the challenges facing the retail market, there is an opportunity to revitalize the business to enable it to capitalize on positive trends in the high-growth beauty market,” Aurelius said in November. New release Announcing the upcoming acquisition.
A spokesperson for Natura & Co told CBC News that the company was surprised when it learned through the media of Aurelius’ intentions to appoint an administrator. The spokesperson added in an emailed statement that the company is “particularly concerned by reports that some reports are pending Payments owed to current and former employees From The Body Shop they didn’t get paid by Aurelius.”
The spokesman said that part of the terms of the sale between the two companies included these payments through an agreed reduction in the purchase price. Natura & Co sold The Body Shop for £207 million, or about C$351 million.
“We have sought an explanation from Aurelius for not making these payments and have contacted Aurelius and its advisors on several occasions regarding these matters.”
Management decision “reality check”
Lee describes Aurelius’ announced decision to appoint directors as a “reality check.”
“It also bodes poorly for other Body Shop operations around the world. They could be next, and it really depends on what they can contribute to the new owners’ bottom line.”
Last year, The Body Shop launched at the age of 50 Drug market for shoppers Stores across Canada.
The Body Shop has also opened a handful of “Change maker workshopStores in major Canadian cities to “empower Canadians to channel their inner activism” – welcoming increased traffic and sales compared to brick-and-mortar stores, according to Hilary Lloyd, vice president of brand and corporate social responsibility at The Body Shop North America.
Canadian beauty industry sales It rose 18 percent in 2023According to global analytics firm Circana. The company expects an overall global increase It will continue this yearespecially for high-end products.