- Body Shop faces administration
- Ownership changes affected company
- Brand seeks revitalization, restructuring
The appointment of administrators by the UK division of The Body Shop this week is anticipated to lead to the closure of stores and the loss of jobs.
The owner of the establishment, founded in 1976 by the late Dame Anita Roddick, is expected to engage professionals to undertake a significant restructuring of the retailer.
A few weeks ago, the private equity firm Aurelius acquired The Body Shop.
Observers widely acknowledge that trade during the crucial Christmas season and into January fell short of expectations.
Additionally, it emerged that The Body Shop lacked adequate working capital.
In addition to its headquarters in London, the retailer’s British operation comprises over two hundred stores there. Additionally, The Body Shop employs a considerable workforce.
The company is expected to appoint restructuring specialist FRP Advisory as the administrator in the coming days.
It is exceedingly improbable that the Body Shop brand will entirely vanish from the high streets of the United Kingdom. However, cost reduction, including property and rent expenses, and the development of online presence will be priorities.
There is optimism that a restructuring will enable the company to compete more effectively with bath bomb manufacturer Lush, which is particularly popular among younger consumers.
Ownership Changes and Ethical Dilemmas
The Body Shop has undergone three ownership changes since its founder Dame Anita sold the company in 2006, shortly before her passing the following year.
The business earned a reputation for its commitment to ethical business practices and its opposition to animal experimentation on beauty products. It grew from a single storefront in Brighton during the 1970s under the direction of Dame Anita and her spouse, Gordon Roddick.
Its successful advertising campaigns attracted legions of customers, particularly teenagers, and resulted in a substantial period of growth during which stores carried its most popular products, including White Musk fragrance, hemp hand cream, and various body butters.
Some committed customers saw Dame Anita’s £652 million sale to L’Oreal as a breach of the company’s ethics.
In 2017, L’Oreal sold the company for £880 million to Brazilian beauty behemoth Natura. Late last year, the company was once more transferred when Aurelius acquired it for £207 million.
Mark Constantine, co-founder and chief executive officer of Lush, told the Sunday Times that The Body Shop had relocated manufacturing to the Philippines under L’Oreal’s ownership, resulting in higher profit margins and “marketers discounting to create sales.”
However, Mr. Constantine, whose former company was a major supplier to The Body Shop, stated, “You cannot reduce the quality of everything, eliminate the value proposition, and increase profits without customers noticing and leaving.”
Revitalisation Amidst Strategic Shifts
They lost the sense that one was contributing to a better world when purchasing a Body Shop product, he told the newspaper.
Aurelius stated in its acquisition of The Body Shop that it intended to revitalise the company and expand its brand.
Reviving the firm to leverage on high-growth beauty market trends is possible despite the tough retail market.
The Body Shop claims to employ 10,000 people on its official website, with an additional 12,000 employed through franchises. Additionally, it operates in excess of 3,000 retail locations across over 70 countries.
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The Body Shop announced in January, however, that it was divesting its operations in parts of Asia and the majority of mainland Europe.
It stated at the time, as reported by Retail Week: “This places The Body Shop’s strategically significant markets and relationships with global head franchise partners even higher on the list of priorities; the company will seek out opportunities to strengthen these connections.
Additionally, The Body Shop will prioritise enhancing consumer outreach through the development of novel sales channels, fortifying digital platforms, and offering distinctive retail experiences.
