The Body Shop’s UK business has collapsed into administration, placing nearly 2,000 jobs at risk.
Restructuring firm FRP Advisory has been appointed as administrator, which will continue to keep the business open during the restructuring process.
It could also potentially see some of the chain’s 200-plus UK stores shuttered to help reduce costs, sources close to the matter have claimed.
The administration process for the British arm of The Body Shop’s business will not affect its global franchise partners.
The advisory firm said its goals are to create a more “nimble and financially stable” UK business, and will “consider all options” for the embattled beauty brand.
“Taking this approach provides the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalising this iconic British brand,” a spokesperson for FRP Advisory said.
The administrator added that The Body Shop has faced an “extended period of financial challenges under past owners”.
This includes multiple consecutive quarters of losses, with former owner Natura & Co cutting leadership and staff roles in an attempt to limit the impact on its earnings.
The Brazilian cosmetics giant would go on to put the The Body Shop up for sale in September 2023.
Investor Aurelius Group snapped it up for £207m two months later, a fifth of the price Natura & Co paid in 2017 when it acquired the brand from L'Oréal.
Aurelius has since sold parts of the beauty retailer’s Europe and Asia business to an unknown family office.
This offloading formed part of a wider strategic plan to bolster The Body Shop’s operations in other key markets.
“Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring,” the spokesperson added.
Former owner Natura & Co has also contacted Aurelius over alleged unpaid bonuses to former employees.
More than 20 former The Body Shop employees are reportedly owed between up to £3m in bonuses following the sale of The Body Shop.