A week after The Body Shop fell into administration, it has been confirmed that just under half of its 198 stores in the UK will close as part of efforts to create a more financially viable business.
Administrators FRP, tasked with overseeing the retailer’s restructuring, disclosed that seven sites will close immediately, with more to follow in the coming weeks. The headcount at The Body Shop’s offices in London and Littlehampton will also be reduced by 40% to 400 full-time staff.
“After years of unprofitability and following a full evaluation of The Body Shop’s UK business, the joint administrators have concluded that the current store portfolio mix is no longer viable,” FRP said yesterday.
It noted that reducing the ethical beauty retailer’s exposure to bricks & mortar stores will allow it to focus on the brand’s products, online sales channels and wholesale strategies.
FRP stated that the turnaround plan would create a more “nimble, financially viable model”, adding: “This swift action will help re-energise The Body Shop’s iconic brand and provide it with the best platform to achieve its ambition to be a modern, dynamic beauty brand that is able to return to profitability and compete for the long term.”
Private equity firm Aurelius bought The Body Shop from Brazilian beauty giant Natura &Co for £207m in November and took over its operations at the beginning of the year. It is understood to be the main creditor, with secured debt that will ensure it gets paid by administrators before most other creditors.
Reports suggested that Aurelius is in pole position to buy back a leaner The Body Shop business, shorn of its liabilities, with other interested parties likely to have to pay more than what the private equity is owed.
The future of the group’s operations in Ireland, mainland Europe and Japan also hang in the balance after being sold to a group called Alma24, whose main director is said to have links to Aurelius. The German arm of The Body Shop, which has about 60 stores, was put into insolvency last week and workers in Belgium have been told it is also heading for insolvency.
