- Written by Dearvale Jordan
- BBC News business reporter
image source, Getty Images
The Body Shop's UK operations are due to appoint administrators this week, which is likely to result in store closures and job losses.
The owners of the company, founded in 1976 by the late Mrs Anita Roddick, are expected to appoint experts to significantly restructure the retailer.
The Body Shop was acquired by private equity firm Aurelius a few weeks ago.
It is understood that trading over the crucial Christmas period and into January was not as strong as expected.
It also became clear that the body shop had insufficient working capital.
The company's UK operations are headquartered in London and have over 200 stores across the UK. The Body Shop also employs a large number of staff.
FRP Advisory, an expert in business restructuring, is expected to be appointed as administrator within the next few days.
It is highly unlikely that the Body Shop brand will completely disappear from the UK high street. But the focus will be on reducing costs such as real estate and rent, as well as increasing its online presence.
It is expected to be reorganized to be more competitive with brands such as Lush, perhaps best known for its bath bombs popular with younger shoppers.
The Body Shop has changed hands three times since 2006, when founder Dame Anita sold it shortly before her death the following year.
The company has become known for its ethical trading ethos and stance against animal testing of beauty products. Starting with her one shop in Brighton in the 1970s, Dame grew under her Anita and her husband Gordon Roddick.
That campaign won over many shoppers, especially teenagers, and led to a period of significant expansion in stores selling popular products such as white musk scent, hemp hand cream, and a variety of body butters.
image source, Getty Images
Dame Anita Roddick started The Body Shop from a single shop in Brighton in the 1970s.
However, some loyal customers saw Dame Anita's decision to sell the company to French beauty giant L'Oréal for £652m as a betrayal of the company's ethical values.
L'Oréal then sold the company to Brazilian beauty giant Natura in 2017 for £880m. Management changed hands again late last year when Aurelius acquired the company for £207m.
Mark Constantine, co-founder and chief executive of Lush, told the Sunday Times that the Body Shop's move of manufacturing to the Philippines under L'Oréal ownership had improved profit margins and that “marketers have We gave discounts to generate sales.”
But Constantine, who was a major supplier to a body shop for many years in his previous job, said: “You can't make everything cheaper, eliminate value, and make more money without customers noticing and going elsewhere. ” he said.
“They have lost the feeling that you had when you bought a Body Shop product, that you were helping to change the world,” he told the newspaper.
When Aurelius bought The Body Shop, he said he wanted to revitalize the business and build the brand name.
“Despite challenging conditions in the retail market, there is an opportunity to reinvigorate the business to take advantage of positive trends in the high-growth beauty market,” the company said.
The Body Shop says on its website that it employs 10,000 people and employs a further 12,000 staff through franchises. It added that it has about 3,000 stores in more than 70 countries.
However, The Body Shop announced in January that it would sell its operations across much of mainland Europe and parts of Asia.
At the time, the company told Retail Week: “This will further prioritize and explore opportunities to build on The Body Shop's strategically important markets and relationships with our global head franchise partners.”
“The Body Shop will also focus on reaching customers more effectively through enhanced digital platforms, development of new sales channels and differentiated retail experiences.”
