The Body Shop has been rescued from administration by a consortium led by the British cosmetics tycoon Mike Jatania in a deal that will keep the ethical beauty brand’s remaining 113 UK stores trading.
Auréa, the growth capital firm founded by Jatania and former UBS, Credit Suisse and Merrill Lynch executive Paul Raphael, said it had bought all the Body Shop International’s assets, which include its UK stores and control of outposts in Australia and North America for an undisclosed sum.
It is understood the new owners, who finalised a deal late on Friday, do not plan to close any of the UK stores currently operating, which employ more than 1,300 people.
A spokesperson for Auréa said: “We believe that the stores are an important part of the brand’s connection to its customers. We will naturally monitor the footprint of the estate to make sure that we are optimising performance through that connection.”
Founded in 1976 by Anita Roddick, The Body Shop went into administration in February after its owner, Aurelius, which had bought the company for £207m three months earlier, said it could not revive the business’s fortunes. It owed creditors more than £276m at the time.
Administrators from FRP Advisory have since closed 85 shops, leaving 113 open, while almost 500 shop jobs and at least 270 office roles have been cut. Stores in most of Europe and in the US have also closed as the supply of product from the UK parent group was cut off. Most Asian outlets, which are run by franchisees, continue to operate.
Auréa said the Body Shop acquisition was its largest transaction to date and it aimed to “steer The Body Shop’s revival and reclaim its global leadership in the ethical beauty sector it pioneered”.
Jatania will serve as chair and Charles Denton, the former chief executive of the beauty brand Molton Brown, will act as chief executive.
The group is understood to be in talks with a number of providers to secure working capital for the venture. Restructuring specialist Hilco is lined up to provide £30m, according to a report by Sky News.
“Auréa will apply its investment acumen, deep industry knowledge and operational expertise to rebuild the business while honouring the heritage and values that connect the brand with its customers,” the group said in a statement.
The group already owns brands including Herbivore Botanicals, a plant-based cosmetics firm; Scandinavian Biolabs, a natural haircare product; and Decypher, which produces and sells foundation makeup.
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Jatania previously ran Lornamead, which owned personal care brands including Lypsyl, Woods of Windsor, Yardley and Harmony haircare. He sold it to a rival, Li & Fung, for about £155m more than 10 years ago.
Jatania said: “With the Body Shop, we have acquired a truly iconic brand with highly engaged consumers in more than 70 markets around the world. We plan to focus relentlessly on exceeding their expectations by investing in product innovation and seamless experiences across all of the channels where customers shop while paying homage to the brand’s ethical and activist positioning.”
Denton said: “I am truly excited to lead this brand, which I have admired for many years. We recognise that revitalising the business will require bold action and a consumer-centric, commercially agile mindset. We believe there’s a sustainable future ahead and working closely with the management team we aim to restore The Body Shop’s unique, values-driven, independent spirit.”
Steve Baluchi, the director of FRP, said: “We’re pleased to be able to hand over The Body Shop to experienced new owners that have a long track record of successful retail turnarounds. They recognise the enormous value of its household name brand and have a clear vision for its future.”