After The Body Shop went into administration and put more than 2,000 job at risk, landlords are preparing for a wave closures.
Aurelius, a private equity firm, put the UK branch of the ethical cosmetics brand, which has around 200 stores, into administration on February 2, just weeks after it had been purchased from its previous owners Natura & Co. for £207m.
FRP Advisory’s administrators will now examine all options for finding a solution to the UK business. They will inform creditors and employees of their findings in due time.
This could be a blow to the landlords of the chain, including many independent landlords as well as local authorities and large property groups.
Land Securities Group, the owner of Westgate Shopping Centre, Oxford, is among the Body Shop’s largest landlords. Other investors include Nuveen Real Estate and Network Rail, which is one of the biggest investment managers in the United States.
The Body Shop is located in the shopping centres of Landsec, including White Rose Centre, Leeds, and Bluewater, Kent.
According to The Body Shop’s latest financial statements, its leasing liabilities were £57m by the end of 2022.
Alan Spencer, Savills’ head of UK retail, stated: “Given that rents have fallen over the past five to ten years and The Body Shop has been in some locations for some time, we can expect to see many landlords go through some pain, as in previous administrations.”
In some areas, particularly in market towns, the demand is strong. This may present an opportunity to landlords.
While administrators try to restructure The Body Shop’s business, the retailer will keep its UK stores open and continue to sell on-line. The Body Shop franchise partners in other countries will not be affected by the process.
Administrators said in a statement: “The Body Shop faced extended financial challenges under previous owners, coinciding a difficult retail environment.
The Body Shop has taken rapid action over the past month. This included closing The Body Shop At Home, selling its business in most of Europe, and parts of Asia. The next step is to focus on the UK market.
Sky News reported Saturday that Aurelius had sold many of Body Shop’s European, Asian and European businesses to an unknown investor.
The Body Shop, founded in Brighton by environmentalist Dame Anita Roddick in 1976, was widely credited with bringing “cruelty free” or ethical beauty products to the mainstream.
Today, it has stores in 70 countries with up to 10,000 employees and as many as 3,000 shops.
The retailer has struggled to maintain sales and compete with newer competitors on the high-street, such as Lush and Rituals.
Before the sale to Aurelius it tried to revitalize its image by relaunching certain shops as “Changemaking Workshops”, which focused on activism that the brand had once been known for.