Beauty products chain The Body Shop has filed for bankruptcy in the United Kingdom with several thousand jobs at risk in the country where this iconic brand has become known for its ethical commitments.
Consulting firm FRP has been appointed to manage the bankruptcy filing and restructuring of the company’s UK operations in order to “revitalize this iconic brand”, it said in a press release.
This procedure only concerns the United Kingdom and not the rest of the global network of this brand known for its early commitments on recycling or against animal testing.
7,000 employees worldwide
The company was sold at the end of 2023 by its former Brazilian owner Natura Cosmeticos to the German investment fund Aurelius. The amount of the transaction was much lower than the billion euros paid by the Brazilian when he bought the group from French giant L’Oréal in 2017.
Its headquarters are in London and the company employs around 7,000 people worldwide — 2,200 in the UK.
The Body Shop brand was founded in 1976 in Brighton (south of England) by British entrepreneur Anita Roddick, a pioneer of environmentally friendly cosmetics, not tested on animals and a supporter of fair trade.
L’Oréal bought the brand in 2006 for around 940 million euros, when it was at the height of its glory, and the charismatic businesswoman was criticized for this choice, accused by some of making a pact with the enemy. Her health was failing, however, and Anita Roddick died the following year.
Declining profitability
The brand’s star faded after the disappearance of its founder and the sale to L’Oréal. Having lost its pioneering side, despite significant investments and an acceleration of its international development, its profitability has declined.
The one who had inherited the nickname “The Queen of Green” – the Queen of Green – thanks to her environmentalist positions had created The Body Shop thanks to a loan of 4,000 pounds taken out to open the first store in Brighton in order to meet the needs of her family while her husband crossed America on horseback.
The walls are painted dark green to hide damp spots. Everything happens very quickly: retirees appreciate finding old-fashioned beauty products based on beeswax and glycerin, young people fall for cucumber cleansing lotions and strawberry exfoliants.
“In the 1980s, The Body Shop was the go-to place for young female shoppers to spend money on scented bubble baths or beauty lines with a deep environmental conscience, focus on social justice and conservation. nature,” notes Hargreaves Lansdown analyst Susannah Streeter.
“But stores like Lush are attracting a larger share of the teen and pre-teen wallet now, with innovative ingredients and scented bath bombs,” she continues.
And if Anita Roddick was “a visionary, proposing refillable bottles to limit plastic pollution, decades ago, this policy was silently abandoned in the 90s in favor of gift baskets, and only revived a few years ago, too little, too late,” concludes Ms. Streeter.
For Russell Pointon, analyst at Edison Group, “the possible disappearance of a brand that has been a fixture on shopping streets for nearly 50 years is a harsh reminder of the difficulties faced by small retailers.”
Final nail in the coffin
According to him, the brand saw a sharp fall in turnover in 2022, from £487 million to £408 million, and “a poor Christmas season was the final nail in the coffin”.
Brands presenting ethical or environmental arguments are no longer rare, and cost pressures on small businesses have already led to serial store closures at many store chains like Wilko — nearly 12 000 jobs lost.
In total last year, nearly 120,000 jobs were lost in small businesses in the United Kingdom, a sign of the impact of the purchasing power crisis in the country.
This article is originally published on lalsace.fr
