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The Body Shop’s new European private equity owners are set to call in administrators for its UK business only weeks after the retailer changed hands in a £207mn deal.
Aurelius, which also owns sportswear chain Footasylum and chemist Lloyds Pharmacy, bought the cosmetics brand from Brazilian company Natura & Co in November and took over its operations at the beginning of the year.
The retailer, which has about 200 outlets in Britain, is poised to appoint administrators at FRP Advisory, in a move that could lead to closures and job losses, a person familiar with Aurelius’s thinking said. The move was first reported by Sky News.
Insolvency practitioners could seek to secure lower rents in an effort to reduce the business’s day-to-day costs, the person said.
The private equity firm concluded the business had insufficient working capital and was trading more weakly than it had anticipated, the person added, and it intended to act quickly to put it on a firmer financial footing.
Diane Wehrle, CEO of Rendle Intelligence and Insights, said any prospective shop closures would be “a serious blow to UK high streets”.
“It’s likely that the focus moving forward will be geared much more to online, which will be better suited to what is now clearly a disparate customer base,” she added.
The administration process for the UK operations is not expected to affect the brand’s global franchise partners.
Aurelius, which has offices across Europe, specialises in buying and turning around unloved businesses carved out of corporations or companies facing operational difficulties.
Last month it confirmed it signed an agreement with “an international family office to sell its business in most of mainland Europe and in parts of Asia” as it took a “decisive step towards delivering a strong turnaround strategy”.
The confirmation came weeks after Aurelius said it would seek to improve the performance of a business that had struggled under previous ownership and had to contend with other companies catching up with its once-unique ethical messaging. Natura paid €1bn to acquire the business from L’Oréal in 2017.
Founded in 1976 by the late Anita Roddick and her husband Gordon, The Body Shop was among the first companies to promote so-called ethical consumerism that argued that business could be a force for good.
“The Body Shop is a business many of us grew up with,” Tristan Nagler, a partner at Aurelius, told the Financial Times in November. “There is an opportunity to put it on its own two feet and return it to its former glory.”
Aurelius, The Body Shop and FRP declined to comment.
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