High-street retailer The Body Shop’s UK business has collapsed into administration, the firm confirmed today, only weeks after private equity firm Aurelius bought the business.
News that it was planning to appoint administrators emerged over the weekend with a report from Sky News.
Administrators at FRP have been appointed to take over the firm and attempt to sell its assets, in order to repay the iconic cosmetics brand’s debts.
It’s the latest high-street retail collapse, after the high-profile failures of Wilko and Cath Kidston last year.
The chain, founded by Dame Anita Roddick, has more than 200 UK stores, while its global headquarters are located at London Bridge.
According to its most recent accounts, The Body Shop had 2,568 employees in the UK.
The Body Shop stores will continue to remain open while the firm is in administration, but if a buyer for its stores is not found soon, they may be forced to close.
The administrators said: “Taking this approach provides the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalizing this iconic British brand. The Joint Administrators will now consider all options to find a way forward for the business and will update creditors and employees in due course.
“The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand, relevant to customers and able to compete for the long term. Creating a more nimble and financially stable UK business, is an important step in achieving this.
“The Joint Administrators will continue to trade the business in administration, ensuring customers will be able to continue to shop in store and online for their favourite products.
“The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector. Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring.”
Tim Symes, partner in the Insolvency and Asset Recovery team at leading law firm Stewarts, said: “This could be a tactical administration appointment designed to shed creditors and cut costs following the purchase by new owners just before Christmas, or the directors simply had no choice.
“Putting the business through administration will give immediate respite from creditors and allow a leaner, viable business to emerge, albeit with substantial creditor casualties in the form of suppliers and landlords.”
