The once iconic but now faded brand The Body Shop is set to file for bankruptcy in the UK later this week. The information, initially revealed by Sky News and confirmed by Le Monde, concerns only the 200 or so stores in the UK, not the rest of the world. It does, however, illustrate the slow decline of one of the brands that pioneered "ethical" cosmetics, notably without animal testing.
Outside the UK, brand restructuring is also underway. Venture capital fund Aurelius, which bought the group in November 2023, has appointed a firm to put subsidiaries "in most of mainland Europe [without specifying whether France is among them] and in parts of Asia" up for sale. The network up for sale represents 14 % of Group sales.
Founded in 1976 in Brighton by animal rights and human rights activist Anita Roddick, The Body Shop grew exponentially in the 1980s, opening up to two stores a month and going public. Its range of ingredients were considered exotic at the time – cocoa butter, aloe vera, jojoba oil, etc. – and its social and environmental credentials made it a radically new concept. It was later copied and followed by many other brands.
Mediocre Christmas sales
Its sale to L'Oréal in 2006, one year before Roddick passed away at 64, seemed to have marked the beginning of difficulties. This sale to a multinational far removed from the ethical priorities of the brand's founder provoked controversy in the UK. A decade later, in 2017, The Body Shop was already in serious decline, and L'Oréal sold it for €1 billion to Brazilian cosmetics group Natura & Co.
But the decline kept accelerating until the company was sold in November 2023 for £207 million (around €240 million) to Aurelius. This represented a fourfold reduction in value in six years. The venture capital fund inherited a brand that it knew to be weighed down by too many stores and an insufficient online presence. Poor sales over the Christmas period persuaded it to hasten the radical restructuring.
The filing for bankruptcy, which is due to be confirmed by a British commercial court in the next few days, should enable the appointment of administrators from FRP Advisory. Their task will include trying to renegotiate rent for a number of stores and no doubt closing others. The Body Shop continues to hire 7,000 people worldwide, with 900 directly-operated stores in 20 countries and 1,600 franchises in 69 other countries.