Source: AFP
The British arm of The Body Shop, the nearly 50-year-old cosmetics company known for its ethical hair and skin products, has gone bankrupt, administrators said on Tuesday, putting thousands of jobs at risk.
The retailer has appointed experts from FRP Advisory to oversee the administration — a process in the UK where financial experts are brought in to try to save parts of a company.
“The directors of The Body Shop International Limited have today appointed Tony Wright, Geoff Rowley and Alastair Massey of business consultancy FRP as joint administrators of the company, which manages The Body Shop’s UK business,” a statement from FRP.
“Taking this approach provides the stability, flexibility and security to find the best means of securing The Body Shop’s future and reinvigorating this iconic British brand.”
The trustees will notify creditors and employees in due course.
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German private equity firm Aurelius only bought The Body Shop in November, but the retailer struggled in a tough economic climate during the key Christmas period.
Founded in 1976 by Anita Roddick, The Body Shop has become a staple of the British high street but has been under various owners since it sold to French cosmetics giant L’Oreal in 2006.
The Body Shop has around 200 stores in the UK, or around 7 per cent of its global total of around 3,000 stores in more than 70 countries.
The company directly employs approximately 10,000 people, while 12,000 more are employed through franchises.
Since taking over, Aurelius had already sold The Body Shop business across most of mainland Europe and parts of Asia to an unnamed buyer.
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“The Body Shop has faced an extended period of financial challenges from previous owners, coinciding with a challenging trading environment for the wider retail sector,” administrators added in Tuesday’s statement.
“Having taken swift action over the past month, including closing The Body Shop At Home and selling its business across Europe and parts of Asia, focusing on the UK business is the next major step in the restructuring of The Body Shop’.
Roddick, who died in 2007 of a brain haemorrhage, had rapidly expanded the business from modest beginnings, determined to offer products that had not been tested on animals.
It has also set about making its business environmentally friendly, with customers encouraged to return empty containers for refills at the original store in Brighton, on England’s south coast.
Brazil’s Natura Cosmeticos, which had bought The Body Shop from L’Oreal, sold it late last year to Aurelius for £207m, far less than the previous owners had paid.
Source: AFP