Administrators for The Body Shop are allegedly investigating claims that millions of pounds were taken out of the business before its collapse into administration.
Restructuring firm FRP Advisory is reportedly looking into claims of unaccounted for funds that pre-date the cosmetics retailer’s sale to Aurelius Group last year, according to The Telegraph.
The investigation is said to be in its early stages.
Questions surrounding the circumstances of The Body Shop’s UK business falling into administration are also growing after leaked documents revealed the business was profitable last year.
The company’s UK retail arm saw £19m of profits on sales of £163m during the run-up to its collapse, according to figures seen by The Telegraph.
However, these figures are for the chain’s UK stores and do not cover costs from its global operations.
The documents also revealed that just eight of The Body Shop’s UK stores were loss-making, according to reports by City AM.
Two shops earmarked for closure – Ipswich and Hempstead Valley – made nearly £100,000 in underlying profit each.
FRP Advisory has reported that 75 of The Body Shop’s UK stores will be shuttered, with 116 remaining open as part of its restructuring plans.
Calls for a more thorough review of The Body Shop’s failure have also come from UK MPs after it was revealed that approximately 489 staff will be made redundant.
The cosmetics retailer’s redundancy bills could potentially be footed by UK taxpayers via a government-backed scheme that is funded by national insurance contributions.
The Body Shop’s Denmark arm has also filed for bankruptcy, with 15 stores set to close and roughly 90 roles impacted.
The Body Shop’s uncertain future has also left its fair trade suppliers worried that they could be stuck with more than US$1m worth of beauty stock.
Aurelius is also in talks with The Body Shop’s former owner Natura & Co over alleged unpaid bonuses of up to £3m to former employees.
Amendment: This article has been updated to specify that The Body Shop has collapsed into administration.
Read more:
- The Body Shop’s next steps: Inside an administration journey
- The Body Shop is ‘opportunistic’, not failing, says ex-CEO
- Why does no one know what to do with The Body Shop?
