The Body Shop is to cut 300 jobs at its UK head office while dozens of its 198 stores in the UK could close with the likely loss of hundreds more jobs as the business battles for survival.
Administrators told staff on Tuesday that seven British stores would close immediately but promised no more than half of its total would close over time, while numbers at its offices in London and Littlehampton in Sussex were being cut by 40 per cent to 400. It is not clear if jobs at the group’s warehouse, also in Littlehampton, will be affected.
The retailer, which employs more than 2,200 people in the UK, called in administrators last week, less than two months after being taken over by the restructuring specialist Aurelius.
Joint administrators Tony Wright, Geoff Rowley and Alastair Massey from FRP said: “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. As an immediate step, seven stores will close today, with additional closures to follow. It is expected that at the conclusion of the restructuring, more than half of The Body Shop’s 198 UK stores will remain open.”
“A reduced store footprint, will coincide with a renewed focus on the brand’s products, online sales channels and wholesale strategies, bringing the brand in line with industry peers and supporting a return to financial stability.”
Aurelius is understood to be the main creditor, with a secured debt which will ensure it gets paid by administrators ahead of most other creditors. It is expected to take back the chain, but only after many shops have closed and jobs been cut.
The Body Shop was bought by Aurelius for an initial payment of £117 million (€137 million) in a deal agreed in November and finalised in early January.
The future of the group’s Irish, mainland European and Japanese divisions also hangs in the balance after being sold to a group called Alma24, whose main director has close 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, where there are about 16 stores, have been told it is also headed for insolvency.
The Body Shop’s fair trade suppliers who work with local communities of growers and producers from the Amazon to Africa say they have been left with more than $1 million (€920 million ) worth of beauty ingredients that may now never be ordered or paid for by the ethical beauty chain.
The Body Shop has passed through three owners since it was sold by its founder, Anita Roddick, shortly before her death in 2007.
Roddick, who set up the business in Brighton in 1976, campaigned against animal testing of cosmetics and promoted natural products sourced ethically in a way that would support small producers around the world.
She shocked fans of the brand by selling up to L’Oréal, the cosmetics multinational that owns Maybelline and Garnier, for £652 million.
The brand was then sold on to the Brazilian natural cosmetics group Natura, which already owned Australia’s Aesop beauty brand, for €1 billion in 2017. After Natura built up debts in buying the Avon home-selling cosmetics group, it quickly sold off Aesop and then The Body Shop. - The Guardian
