Directors of the UK’s biggest vegan beauty chain, The Body Shop beget confirmed they can win the retailer up for auction after it became the most in model excessive avenue trace to enter administration in mid-February.
The trace’s leadership had hoped that the corporate would be ready to continue below a restructuring procedure. But directors at FRP Advisory, which has been overseeing The Body Shop since its collapse, confirmed this week that this may per chance per chance no longer be viable.
The Body Shop used to be first founded in 1976 by the unhurried Dame Anita Roddick and her husband Gordon, who bought it to L’Oreal in 2006. It has changed palms four instances since then.
Most fair no longer too lengthy in the past, it used to be bought to the investment company Aurelius for apt over £200m in 2023. This low rate used to be as a result of a harsh retail landscape that has seen The Body Shop dwindle from roughly 3,000 stores across 66 worldwide locations in 2017, to roughly 100 UK shops this day.
Why is The Body Shop being auctioned off?
An auction used to be no longer the first selection for FRP Advisory. The company had reportedly been looking to attain a Firm Voluntary Agreement (CVA) with The Body Shop.
Save merely, a CVA is basically a compensation procedure for firms dealing with insolvency and their collectors, or those it owes money to, to restructure its debt.
On the different hand, FRP Advisory has been unable to attain a CVA. This capability the emblem is in a severe financial instruct that collectors design no longer inform it’ll improve from.
Here’s supported by the directors’ fable, through which Aurelius refers to The Body Shop’s “brief-term money predicament [which] used to be detrimental to that that had been forecast, pushed by uncomfortable leads to the 2023 financial 365 days and the unwinding of the corporate’s working capital”.
By auctioning off the emblem, Aurelius can are attempting to recoup a pair of of the chain’s price. This can involve promoting off key assets – in The Body Shop’s case, which formula its top retail actual estate, with shops across many of the UK’s finest cities and cities.
The auction won’t be like your contemporary Cash In The Attic episode, nonetheless. The Body Shop’s financial worries apart, the corporation’s rate ticket will aloof be in the hundreds and hundreds.
Plenty of beefy-name producers which had been auctioned off encompass Jimmy Choo, which used to be bought to the US model trace Michael Kors in 2017 for £900m.
What does this mean for The Body Shop stores?
In step with Sky Data, directors are hoping to shut the sale of The Body Shop stores this summer. The auction may per chance presumably per chance well consequence in more retailer closures for the emblem, which has nearly halved its retail presence because it went into administration in February.
The chain has bought off spherical 98 UK stores to this level this 365 days, including the corporate’s flagship retailer on Oxford Avenue in central London. General, the closures resulted in spherical 489 job losses.
There are for the time being no plans to shut the relaxation 100 stores. On the different hand, their future will rely on how the auction is formatted.
If the winning bidder buys your whole retail chain, the relaxation shops will probably dwell open, pending any choices by the current homeowners. On the different hand, if the stores are bought off in my conception, alongside with their stock and fixtures, this may per chance per chance doubtlessly consequence in them being rebranded.
Given this day’s dire excessive avenue, with footfall falling, there is additionally a risk that no bidders will explicit hobby. In this depressed scenario, the stores would probably be closed completely.
Who will aquire The Body Shop?
The Body Shop has constructed up a proper following thanks to its company values that rejected animal testing, a innovative stance throughout the 1970s and 80s. It has additionally cemented itself as an environmentally-friendly vendor.
Followers will now be eagerly attempting forward to news that a expose has been permitted. Among the many parties which beget expressed hobby in shopping The Body Shop is the most indispensable division retailer, Next.
FRP has expressed optimism this will win a purchaser, pointing out it has been “inspired by the diploma of hobby bought to this level from spellbinding parties” in a commentary given remaining week.
“The Body Shop stays an iconic trace and following the structural changes we beget now made to the industrial since our appointment we preserve in mind it has a viable future,” it added. “This may per chance per chance be showcased to capability acquirers throughout the sale course of.”