The Demise of The Body Shop
Two weeks ago, The Body Shop announced that its UK and German operations would go into administration, leaving in uncertainty customers and employees alike. Just a few hours ago, however, the UK administrators shared that the beauty retailer would close 75 stores in the next four to six weeks. It is expected that 489 employees will be laid off as part of the restructuring. This comes on the heels of 7 store closures in late January, and it’s expected that more than half of The Body Shop’s 198 stores will be shut down in the UK. 40% of the staff at the corporate headquarters are also expected to be laid off. All 60+ stores in Germany, as well as its head office, are also expected to close in the country.
Stores in Luxembourg, Austria, Ireland, and Belgium are also expected to fall into administration. More importantly, the future for the stores in France, Spain, and Sweden is uncertain, since no official documents transferring operations to the new family office have been signed just yet.
The beauty retailer was acquired by private equity firm Aurelius Group from Natura & Co in November 2023 for a little over USD 250 million. The Body Shop was founded in 1976 by Dame Anita Roddick, who then sold the brand to beauty giant L’Oreal in 2006, who in turn sold The Body Shop to Brazilian natural cosmetics group Natura in 20017. However, Natura had also acquired earlier that year Australian brand Aesop for slightly over USD 1 billion, and was already overleveraged after buying Avon, the iconic home-selling beauty brand, thus forcing Natura to sell off not just Aesop, but also The Body Shop.
The acquisition carousel made another turn when Aurelius agreed to sell most of its business in mainland Europe and parts of Asia to a family office. The agreement represented about 14% of the retailer’s global revenue. Alma24, who is assumed to be Aurelius’ partner, was understood to have also taken over operations in Japan and Ireland.
It remains to be seen what will happen to the Body Shop’s operations in Canada and Australia, where the brand remains successful. Last year, The Body Shop Canada partnered with Shoppers Drug Mart to launch 53 shop-in-shop spaces. The Body Shop Canada has 108 stores in the country, and with this partnership they seek to “bring The Body Shop to more consumers and to make it more convenient for people to shop The Body Shop.”
At one point, The Body Shop had a network of more than 3,000 stores in over than 70 countries and was hailed as a paragon of sustainability with its recycling and refill stations, as well as their vegan formulations.
So, where did it all go wrong? Journalist Louis Whitbread believes that the downfall of The Body Shop started in 2006 when Roddick sold the brand to L’Oreal, a company who wasn’t very forthcoming with its ethical practices and did not align with The Body Shop customer’s core values. Lush, became thus a suitable alternative to the embattled beauty brand. Market saturation for eco-friendly and sustainably brands, as well as basically inexistent brand loyalty from Millennial and Gen Z consumers alike only accelerated the The Body Shop’s demise. Whitbread goes on to say that ““It’s so competitive that to stand out, brands not only need high-performing products, but a strong social presence, transparent values and a distinctive tone of voice.”
Aesthetician and beauty brand developer Alicia Lartey further adds that The Body Shop simply refused to evolve and adapt to changes in consumer behavior: “Certainly, in 2024, we expect much more from our skincare, says Lartey; we especially want to understand the science behind ingredients, the proven benefits and exactly how a product works.”
