RESTRUCTURING AND INSOLVENCY

The Body Shop; once a pioneering ethical brand, now in administration

Frank Bouette, Restructuring and Insolvency Partner, provides commentary on the Body Shop Administration and the fragility of the high street.

Founded in 1976 Brighton based on ethical principles it was a giant of UK brands, sold by Anita Roddick for £652m in 2006 to L’Oreal, to Natura for £880m in 2017 and to Aurelius for £200m in 2023.

Some loyal customers saw the L’Oréal sale as a betrayal of its values, and one that eroded its loyal customer base.  Many say the sale meant it lost its guiding and ethical leader; lost its soul.  It once stood for what a visionary ‘good’ business should be, and people bought into that.  It was sold to a brand that appeared, to some, to be the antithesis of that.  Add to that industry comments that L’Oréal was equipped to operate a brand, but not a retailer, and you can see how its identity crisis began.

That, coupled with what analysts describe as a “lack of innovation” (the once brand of the youth became the brand of mum (and granny)), and competitors started to emerge and catch up in its space; it was bound to face increasing challenges.  Its fortunes improved during the pandemic, when people pampered themselves, but fell again as the costs increased and discretionary customer spend tightened post pandemic, when customers looked for more affordable alternatives and some cast ethics aside.

It is understood that Aurelius made the decision to call in administrators following poor Christmas 2023 sales. It is no secret that the high street is fragile, as larger (anchor) stores are exiting high streets for increased online presence and out of town stores.  This is resulting in decreasing footfall, exacerbated by train strikes and the cost-of-living crisis: it is impacting high street spend.  The Body Shop has 206 stores UK wide, many on high streets, and will have felt that impact acutely.  Add to that increased supply chain costs and pressures and it is the perfect storm.

Perhaps The Body Shop had run its course and achieved its purpose; it bought natural, ethical cosmetics and toiletries into mainstream retail and, in doing so, gave up its unique identity.  Without the visionary drive of its founder, and with a sale to a house of brands, it was inevitably going to fade into the mainstream and, as it did so, it struggled to stand out in a competitive market place.

The Body Shop as a brand is unlikely to disappear, but it will have to be slimmed down and reshaped to compete in an increasingly crowded ethical beauty marketplace.

Frank is recognised as an expert in restructuring and insolvency law, and one who provides decisive practical solutions.  He is an experienced and highly regarded restructuring & insolvency lawyer. If you have any queries about administrations or insolvency, please contact a member of the team.

About the authors


about the author img

Frank Bouette

Partner

Restructuring and Insolvency expert with considerable experience handling complex transactions and claims for lenders, investors and office holders.

Stay connected, sign up for updates

Stay connected

Recent articles

Insights

Maximising wealth for future generations – the benefits of a family investment company

A family investment company offers a strategic way to manage wealth, ensure tax efficiency and preserve family assets for future generations.

12/07/2024

Insights

New UK Listing Rules to come into effect on 29 July 2024

The Financial Conduct Authority (FCA) has published the final form of its new listing rules.

12/07/2024

Insights

Capital Gains Tax – how is my investment property affected?

When an individual owns investment property, CGT may be payable when any of these additional properties are sold. We take a look at when an individual may need to consider CGT and the possible impact.

11/07/2024

Insights

The role of an Executor or Administrator in estate administration

Whether you’ve been appointed by a loved one’s Will or by operation of the Intestacy Rules, your role involves legal obligations, financial tasks and, often overlooked, emotional considerations.

10/07/2024