The Body Shop will close nearly half of its 198 stores in the UK. Its head office staffing will be reduced significantly, resulting in hundreds of job cuts.
The company managing the restructuring stated that the current store portfolio of the beauty chain was not viable and confirmed the immediate closure of seven branches.
Tuesday saw the permanent closure of The Body Shop stores in Canary Wharf in London, Oxford Street in London, Surrey Quays in London and Cheapside in Bristol, Nuneaton, Warwickshire and Ashford, Kent.
FRP Advisory stated that additional closures will be expected as part of a wider restructuring plan. After the closures, over half of the 198 stores will stay open.
The Body Shop has about 2,200 employees in Britain. This includes 1,500 workers at the shops and 700 people at its headquarters.
The head office will reduce its staff by 40 percent to 400 full-time workers. FRP stated that the head office restructuring will create a more “nimble and financially viable model” following the sale of earlier loss-making businesses on mainland Europe and in parts of Asia.
Aurelius, the company that bought it for £207 million, had purchased the chain in just a few weeks. Private equity group claims to have discovered that the retailer was in a far worse financial situation than it initially thought. After years of financial struggle, it hired administrators from FRP who promised to “consider all options” in order to move forward.
FRP administrators said: “After many years of non-profitability, and after a thorough evaluation of The Body Shop UK business, they have concluded that this store portfolio mix no longer makes sense.” This quick action will help re-energise The Body Shop’s iconic brand, and provide it with the platform to achieve the brand’s ambition to become a modern and dynamic beauty brand able to compete and return to profitability for the long term.
The Brazilian cosmetics company Natura & Co was taken over by Aurelius – a firm that specialises in buying troubled businesses and turning them around – only a few weeks ago.
The Body Shop sold most of its European operations last month. Alma24 was said to be the buyer, a company owned by Friedrich Trautwein (59), a senior executive with close ties to Aurelius. The Guardian reported that Alma24 had also taken control of The Body Shop Japan and Ireland.
Since then, The Body Shop has begun closing its mainland European businesses. German stores have been placed in administration, and the Belgian employees were told that they would be next. This puts more than 460 job opportunities at risk across the two countries.