The Body Shop’s Subsidiary Enters Into Administration in France
PARIS — The Body Shop’s French subsidiary entered into administration Thursday, in what is the latest in a run of bad news for the ailing beauty retailer.
The Body Shop’s administration process is the result of a toxic combination of overexpansion and underinvestment by past owners, and fierce competition in the beauty market.
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It is also part of a wider restructuring on the part of Aurelius, the private equity concern that acquired The Body Shop from Brazil-based Natura & Co. in mid-November 2023. The deal valued the retailer at 207 million pounds.
The Body Shop had been a trailblazing sustainable beauty brand with a purpose after it began in the ’70s, and its unraveling has had far-reaching effects.
In France, The Body Shop filed for bankruptcy with the Paris commercial court two weeks ago. The retail chain, with about 260 employees in France, now has a six-month observation period granted by the court, until fall 2024, to put in place its recovery plan for the 66 stores in France.
That scenario mirrors the challenges faced by The Body Shop in other parts of the world. Over in North America, on March 1, the retailer said it had just ceased operations in the U.S. Its Canadian subsidiary, with 105 stores across Canada, had started restructuring proceedings. All of those doors remain open for trading, but online sales were stopping and the liquidation of 33 stores had begun.
On Feb. 29, The Body Shop said it was closing 75 stores and laying off more than 480 employees in the U.K. Nine days prior, it said seven stores would be shuttered, leaving 116 locations altogether operational across the country.
Aurelius placed The Body Shop into administration in the U.K. on Feb. 13. At the time, the administrators said The Body Shop would continue to trade as they look for a buyer of all or parts of the business. The retailer then had about 200 stores and 2,568 employees country-wide.
The appointment of administrators at The Body Shop came at a difficult time for brands and retailers alike in the U.K., which are dealing with a decline in consumer confidence, high inflation and soaring interest rates.
The failure of the U.K. business is of particular significance. The Body Shop was founded by Anita Roddick in 1976 and set a template for sustainable beauty brands with “purpose.” Roddick, with her opposition to animal testing and focus on sustainability in manufacturing and the supply chain, was one of the earliest U.K. entrepreneurs to prove that ethics and commerce could work in tandem.
More restructuring has taken place for The Body Shop. Earlier in February, it signed an agreement with an international family office to sell most of its business in mainland Europe and parts of Asia. The part of the activity affected equaled to about 14 percent of The Body Shop’s business worldwide.
Prior to the closures and spin-offs, the B Corp-certified company operated around 2,800 retail locations in more than 70 countries.
In third-quarter 2023, The Body Shop’s sales reached 829 million Brazilian reals, or $164.7 million.
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