A MAJOR update has been issued on the future of the 100 remaining Body Shop branches following mass store closures.
Administrators for The Body Shop have confirmed that the chain is up for auction after a restructuring plan was not deemed viable.
It means that the business and its assets are up for sale.
The news has been confirmed by FRP Advisory, which has been overseeing the business since it collapsed in February.
The operation of the 100 stores still open won’t be affected right now.
However, if a buyer isn’t found, the future of the stores and the business as a whole hangs in the balance.
An FRP spokesperson said: “Following the appointment of joint administrators in February efforts have been made to stabilise the business of TBSI and effect various restructuring initiatives.
“To date there have been efforts to deliver a rescue of TBSI by proposing a Company Voluntary Arrangement (CVA) to creditors.Â
“Prior to launching a CVA efforts have been made to engage with key stakeholders to agree terms on various matters.Â
“Despite the engagement of various parties, it has not been possible to reach the necessary agreements for a CVA to be launched.Â
“The joint administrators have therefore decided to commence a sale process for the underlying business and assets of TBSI.Â
“We remain encouraged by the level of interest received to date from interested parties.”
WHAT COULD HAPPEN TO THE BODY SHOP?
The next steps remain uncertain but there have been rumours about other firms looking to buy the chain.
The owners of Next have previously expressed an interest in a takeover, according to Sky News.
Aurelius, the investment firm which took control of it only weeks before administrators were called in, is also among the possible bidders.
WHY IS THE BUSINESS UP FOR SALE?
The Body Shop collapsed into administration on February 13, immediately closing seven stores days after.
In April, administrators for the iconic high street brand proposed a company voluntary arrangement (CVA).
A CVA is a way of restructuring that means a business can continue trading by negotiating its debts, such as cutting rent costs with landlords.
At the time, FRP said that if a CVA could not be agreed, it would sell the business and its remaining assets.
The Body Shop also closed its Avon-style Body Shop at Home service for good, and axed its Ambassador Programme which was set to replace it.
Aurelius, which bought the company last November, also confirmed it had sold off most of The Body Shop business in mainland Europe and parts of Asia in January.
HOW BUSINESS DECLINED
The Body Shop was founded by Anita Roddick and her husband Gordon in Brighton in 1976.
It aimed to set itself apart from other beauty retailers by focusing on ethically sourced and naturally-based ingredients.
The brand joined the L’Oreal group in 2006, before being bought by Natura and Co in 2017.
But the move to sell the business to L’Oreal in 2006 has been seen by some as a key moment when its fortunes started to turn.
Mark Constantine, co-founder of The Body Shop’s rival Lush, was a major supplier to it for years under his previous business.
He previously said that under L’Oreal’s ownership the move of manufacturing to the Philippines allowed for better profit margins, but at a price.
He said: “You can’t cheapen every-thing, remove the values and take more profit without customers noticing and going elsewhere.
“They lost that feeling one got, when buying a Body Shop product, that you were helping to change the world.”
Who was The Body Shop founder Anita Roddick?
Dame Anita Roddick, born October 23, 1942, was a British businesswoman, human rights activist and environmental campaigner.
Throughout her lifetime, Anita was best known as the founder of the Body Shop – a cosmetics company producing and retailing natural beauty products.
Anita opened her first Body Shop in Brighton back in 1976.
The brand first started as a small shop providing quality skincare products in refilled bottles, with the belief that the business could be a force for good.
Following this, the Body Shop went on to become a global retail business serving over 30 million customers worldwide.
As a keen campaigner, Anita was involved in activism for environmental and social issues, such as involvement with Greenpeace and The Big Issue.
In addition to this, in 1990, the late entrepreneur founded Children on the Edge – a charitable organisation which helps disadvantaged children in Eastern Europe, Africa and Asia.
In 2007 Anita, who also worked alongside her husband Gordan, sold the company to L’Oréal, but still played an active role in the business.
French firm L’Oreal paid £625million for the company, providing Anita and her husband Gordon with more than £100million for their 18 per cent share in the business.
In September 2007, Dame Anita Roddick passed away at 64 from a brain haemorrhage after being admitted to St Richard’s Hospital, Chichester, West Sussex.
Her husband Gordon, and her two daughters, Sam and Justine, were at her side.
Before her passing, Anita had revealed that she was diagnosed with Hepatitis C in 2004.
The late founder’s illness was first discovered during a routine blood test for a life insurance policy.
She had lived with the illness for more than 30 years before it was discovered – by which time she was suffering from cirrhosis of the liver.
In 2008, a year after her passing, Anita’s will revealed that she had given away all of her £51million to charity and the rest to tax.
Around 500 staff have lost their jobs and over 270 head office roles have been axed since the chain went into administration.
The Body Shop closed 82 branches in March and April in the following locations:
- Bury
- Aylesbury
- Beverley
- Blackpool
- Carlisle
- Chippenham
- Farnborough
- Grimbsy
- Halifax
- Hempstead Valley
- High Wycombe
- Hull
- Ipswich
- Kendal
- Kings Lynn
- Loughborough
- Morpeth
- Perth
- Salisbury
- Stafford
- Newton Abbot
- Trowbridge
- Banbury
- Barnstaple
- Basildon
- Bedford
- Bexleyheath
- Blackburn
- Bolton
- Broughton Park
- Camberley
- Carmarthen
- Durham
- East Kilbride
- Edinburgh Gyle Centre
- Edinburgh Princes Mall
- Epsom
- Fareham
- Harlow
- Hastings
- Huddersfield
- Ilford
- Isle of Wight
- Islington
- Lewisham
- Lichfield
- Luton
- Macclesfield
- Middlesborough
- Northampton
- Oldham
- Peterborough Queensgate
- Swansea
- Telford
- Trowbridge
- Wakefield
- Walthamstow
- Wigan
- Wolverhampton
- Bournemouth
- Surrey Quays, London
- Oxford Street Bond Street, London
- Canary Wharf, London
- Cheapside, London
- Nuneaton, Warwickshire
- Ashford Town, Kent
- Bristol Queens Road
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun’s business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases retailers are shutting stores because they are no longer the money makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open. In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better performing retail parks instead.
Boss Stuart Machin recently said that when it relocated a tired store in Chesterfield to a new big store on a retail park a half a mile away, its sales in the area rose by 103 per cent.
In some cases stores have been shut when a retailer goes bust, as in the case of Wilko, Debenhams Topshop, Dorothy Perkins and Paperchase to name a few.
What’s increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.