The Body Shop, a once-thriving retailer known for its ethical stance and natural products, is closing down most of its stores due to a series of financial challenges. The company has been grappling with declining profitability over recent years, which led administrators to conclude that the current store portfolio mix was no longer viable. This decision comes after the UK business of The Body Shop slid into a £71 million loss in 2022, with its turnover dropping by almost a fifth, indicating significant financial distress.
Compounding these financial woes, The Body Shop faced controversy when it was sold to L'Oréal in 2006, a move that contradicted its anti-animal testing ethos, as L'Oréal was known for using ingredients that underwent animal testing. Despite efforts to reconnect with its roots, the brand struggled with soaring production costs, an increasingly squeezed consumer base, and weakness in its US operations.
The situation worsened when disappointing Christmas sales and insufficient working capital led to difficulties in meeting day-to-day expenses. Aurelius Group, the private equity firm that acquired The Body Shop in November 2023, went into administration as a way to cut losses and attempt to turn a profit amid a tough market. While customers can still purchase goods from The Body Shop both in-store and online for now, there is a risk that refunds or exchanges may become problematic if local stores cease trading.
The Body Shop's collapse into administration put approximately 2,000 jobs at risk, although it was stated that Canadian stores would not be affected. The brand's failure to innovate its product range, remain competitive on price, and acknowledge rivals such as Lush and Origins also contributed to its downfall. In an effort to create a more financially viable business model, The Body Shop announced the closure of nearly half of its UK stores and the reduction of around 300 head office roles.
Despite these challenges, the future of The Body Shop globally remains uncertain as financial difficulties and ownership changes have led to the current predicament. As of February 20th, 2024, The Body Shop confirmed the immediate closure of over 100 stores, marking a significant contraction of its retail presence.
