Iconic British high street chain could be SAVED from administration after mass store closures
A CONSORTIUM led by British entrepreneur Mike Jatania is closing an agreement to acquire a troubled UK cosmetics retailer out of administration, sources have claimed.
Aurea Holding, an investment business managed by Jatania and former UBS Group AG banker Paul Raphael, is in exclusive talks to acquire The Body Shop after beating out competing bidders in an auction process.
The partnership also includes Charles Denton, the former CEO of fragrance and beauty firms Molton Brown and Erno Laszlo, according to the sources.
The new owners intend to keep all of The Body Shop’s UK stores, according to people who asked not to be identified because the information is confidential.
It comes just weeks after FRP Advisory confirmed that the chain is up for auction after a restructuring plan was not deemed viable.
The Body Shop still operates out of 100 stores, and these will continue to trade as usual for now.
It also employs over 1,500 workers across the UK.
WHAT COULD HAPPEN TO THE BODY SHOP?
FRP remains confident that there are firms looking to buy the chain.
Any potential buyer could be interested in snapping up all or just some of the business.
For example, a buyer may only opt to buy the brand’s name and trademarks without making an offer for the physical stores.
When Paperchase collapsed into administration last year, all 106 shops closed.
But the name lives on as Tesco snapped up the brand, and its range of stationary, cards and gifts can now be bought online and at some selected Tesco stores.
Who was The Body Shop founder Anita Roddick?
DAME Anita Roddick, born October 23, 1942, was a British businesswoman, human rights activist and environmental campaigner.
Throughout her lifetime, Anita was best known as the founder of the Body Shop – a cosmetics company producing and retailing natural beauty products.
Anita opened her first Body Shop in Brighton back in 1976.
The brand first started as a small shop providing quality skincare products in refilled bottles, with the belief that the business could be a force for good.
Following this, the Body Shop went on to become a global retail business serving over 30 million customers worldwide.
As a keen campaigner, Anita was involved in activism for environmental and social issues, such as involvement with Greenpeace and The Big Issue.
In addition to this, in 1990, the late entrepreneur founded Children on the Edge – a charitable organisation which helps disadvantaged children in Eastern Europe, Africa and Asia.
In 2007 Anita, who also worked alongside her husband Gordan, sold the company to L’Oréal, but still played an active role in the business.
French firm L’Oreal paid £625million for the company, providing Anita and her husband Gordon with more than £100million for their 18 per cent share in the business.
In September 2007, Dame Anita Roddick passed away at 64 from a brain haemorrhage after being admitted to St Richard’s Hospital, Chichester, West Sussex.
Her husband Gordon, and her two daughters, Sam and Justine, were at her side.
Before her passing, Anita had revealed that she was diagnosed with Hepatitis C in 2004.
The late founder’s illness was first discovered during a routine blood test for a life insurance policy.
She had lived with the illness for more than 30 years before it was discovered – by which time she was suffering from cirrhosis of the liver.
In 2008, a year after her passing, Anita’s will revealed that she had given away all of her £51million to charity and the rest to tax.
When Wilko collapsed into administration last August, all stores closed.
The Range bought up the brand name and intellectual property and started selling Wilko-branded products in stores.
It then launched a Wilko website and, in a shock move, started opening new Wilko stores on the high street.
Poundland swooped in to acquire 71 Wilko stores, and B&M purchased 51 more sites and integrated them into its own brands.
However, until a firm offer to rescue Body Shop is put on the table, the future of the chain hangs in the balance.
WHY IS THE BUSINESS UP FOR SALE?
The Body Shop collapsed into administration on February 13, immediately closing seven stores days after.
In April, administrators for the iconic high street brand proposed a company voluntary arrangement (CVA).
A CVA is a way of restructuring that means a business can continue trading by negotiating its debts, such as cutting rent costs with landlords.
At the time, FRP said that if a CVA could not be agreed, it would sell the business and its remaining assets.
The Body Shop also closed its Avon-style Body Shop at Home service for good, and axed its Ambassador Programme which was set to replace it.
Aurelius, which bought the company last November, also confirmed in January that it had sold off most of The Body Shop’s business in mainland Europe and parts of Asia.
Since the chain went into administration, around 500 staff have lost their jobs, and over 270 head office roles have been axed.
The Body Shop closed 82 branches in March and April in the following locations:
- Bury
- Aylesbury
- Beverley
- Blackpool
- Carlisle
- Chippenham
- Farnborough
- Grimbsy
- Halifax
- Hempstead Valley
- High Wycombe
- Hull
- Ipswich
- Kendal
- Kings Lynn
- Loughborough
- Morpeth
- Perth
- Salisbury
- Stafford
- Newton Abbot
- Trowbridge
- Banbury
- Barnstaple
- Basildon
- Bedford
- Bexleyheath
- Blackburn
- Bolton
- Broughton Park
- Camberley
- Carmarthen
- Durham
- East Kilbride
- Edinburgh Gyle Centre
- Edinburgh Princes Mall
- Epsom
- Fareham
- Harlow
- Hastings
- Huddersfield
- Ilford
- Isle of Wight
- Islington
- Lewisham
- Lichfield
- Luton
- Macclesfield
- Middlesborough
- Northampton
- Oldham
- Peterborough Queensgate
- Swansea
- Telford
- Trowbridge
- Wakefield
- Walthamstow
- Wigan
- Wolverhampton
- Bournemouth
- Surrey Quays, London
- Oxford Street Bond Street, London
- Canary Wharf, London
- Cheapside, London
- Nuneaton, Warwickshire
- Ashford Town, Kent
- Bristol Queens Road
HOW HAS THE BUSINESS DECLINED?
The Body Shop was founded by Anita Roddick and her husband Gordon in Brighton in 1976.
It aimed to set itself apart from other beauty retailers by focusing on ethically sourced and naturally-based ingredients.
The brand joined the L’Oreal group in 2006, before being bought by Natura and Co in 2017.
But the move to sell the business to L’Oreal in 2006 has been seen by some as a key moment when its fortunes started to turn.
Mark Constantine, co-founder of The Body Shop’s rival Lush, was a major supplier to it for years under his previous business.
He previously said that under L’Oreal’s ownership the move of manufacturing to the Philippines allowed for better profit margins, but at a price.
He said: “You can’t cheapen every-thing, remove the values and take more profit without customers noticing and going elsewhere.
“They lost that feeling one got, when buying a Body Shop product, that you were helping to change the world.”
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun’s business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open. In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
Boss Stuart Machin recently said that when it relocated a tired store in Chesterfield to a new big store in a retail park half a mile away, its sales in the area rose by 103 per cent.
In some cases, stores have been shut when a retailer goes bust, as in the case of Wilko, Debenhams Topshop, Dorothy Perkins and Paperchase to name a few.
What’s increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.