Over the weekend, The Body Shop initiated proceedings for Chapter 7 bankruptcy, a process wherein assets are liquidated to settle outstanding debts. This decision follows the cessation of its operations in the United States and the closure of numerous stores across Canada. Renowned for its presence in malls as a cruelty-free and "ethically produced" beauty retailer, The Body Shop obtained "B Corp" certification in 2019.
In November 2023, German private equity firm Aurelius acquired The Body Shop for an estimated $266 million. Shortly after finalizing the deal, the company was placed into administration by Aurelius. According to a report from The Guardian, earnings from November and December were deposited into a cash pooling account based in the UK. However, access to these funds to cover supplier debts from that period has been severed since the appointment of accounting firm FRP Advisory. The Guardian's report indicates that the North American and Australasian branches are now considered creditors to the UK arm, potentially facing delays of several months for payment through FRP.
The Body Shop's divisions in Germany, Denmark, Ireland, and Belgium have entered insolvency proceedings, while operations in Spain, Sweden, France, and Austria remain uncertain. Furthermore, its Australian and New Zealand branches, comprising nearly 100 stores, are also under threat.
Previously under the ownership of L'Oréal in 2006 and later acquired by Brazilian company Natura in 2017, The Body Shop expanded to over 2,500 retail locations by 2023. However, despite its extensive reach, the company has encountered declining sales figures in recent years. Natura's early 2023 report revealed a year-over-year sales decline of 13.5% in 2022, as reported by CNN
