Sarah Butler
Fri, 16 February 2024
The Body Shop’s UK business went into administration this week.
Photograph: Pavlo Gonchar/Sopa Images/Rex/Shutterstock
The Body Shop’s mainland European businesses have begun shutting down, with the German stores put into administration and its Belgian staff told they will be next, placing more than 460 jobs at risk across the two countries.
The closures come after Aurelius, the German restructuring specialist that bought The Body Shop last year, put the ethical beauty chain’s main UK business into administration this week.
Most of the European operations were sold last month to a buyer whose identity was not initially disclosed by Aurelius. Staff were told the buyer was a “family office” – a term that typically refers to the management of personal wealth.
Related: ‘A scented awakening’: how The Body Shop influenced generations
It is understood the buyer is Alma24, a company controlled by Friedrich Trautwein, an executive who has close links to Aurelius. Alma24 is also understood to have taken control of The Body Shop in Japan and Ireland.
Staff said they had been told that all 60-plus stores and the head office in Germany, where the business employs almost 400 people, were likely to close. An insolvency specialist, Dr Biner Bähr at the law firm White & Case, has been appointed to handle the German business.
Workers in Belgium, where the chain has about 16 stores and 50 employees, are also understood to have been told on Friday morning that administrators were to be appointed.
One source said: “The actions being taken may not be wrong but it is how it is being done that is breaking people’s hearts. People are being told with no notice: ‘You work for an unnamed family company,’ when some of these people have been with the company for years, some 30 years. It is so painful.”
Sources said The Body Shop’s operations in Ireland, Austria and Luxembourg, which together have about 20 stores and more than 100 staff, were also expected to be put into administration shortly. The Austrian and French websites were not operating on Friday.
The problems at The Body Shop’s international divisions mark the latest blow to the group, which has had three owners since it was sold by its founder, Anita Roddick, shortly before her death in 2006.
Roddick, who set up the business in Brighton in 1976 to help support her two daughters, campaigned against animal testing of cosmetics and promoted natural products sourced ethically in a way that would support vulnerable communities around the world.
She shocked fans of the brand by selling up to L’Oréal, the cosmetics giant that owns Maybelline and Garnier, for £652m. The brand was then sold on to the Brazilian natural cosmetics group Natura, which already owned Australia’s Aesop beauty brand, for €1bn in 2017. After Natura built up debts in buying the Avon home-selling cosmetics group, it quickly sold off Aesop and then The Body Shop.
Aurelius agreed to pay £207m for The Body Shop in November last year and took control in January. It only paid £117m upfront, with a further £90m “earn-out” that would only be paid if The Body Shop reached certain financial goals. With large parts of the business now sold off and expected to close, it is not clear if those goals will be reached.
It is understood that the status of a number of countries, including France, Spain and Sweden, is unclear as the directors in those countries have not signed documents finalising transfer of ownership.
The group’s operations in Canada and Australia, which have been successful, are expected to remain open.
One well-placed source said: “We don’t understand today who is the owner and who is responsible for people.”
Aurelius is the main creditor to the UK arm of The Body Shop and so is expected to buy back a downsized version of the business – with as few as 100 stores – from administrators.
Shortly after buying the business, Aurelius made loans to the group that were secured against intellectual property assets and shares in its Canadian arm, as first reported by the Financial Times. This arrangement effectively gives the group control over key assets, making rival bids unlikely.
Alma24 and Aurelius have been contacted for comment.
The Body Shop’s mainland European businesses have begun shutting down, with the German stores put into administration and its Belgian staff told they will be next, placing more than 460 jobs at risk across the two countries.
The closures come after Aurelius, the German restructuring specialist that bought The Body Shop last year, put the ethical beauty chain’s main UK business into administration this week.
Most of the European operations were sold last month to a buyer whose identity was not initially disclosed by Aurelius. Staff were told the buyer was a “family office” – a term that typically refers to the management of personal wealth.
Related: ‘A scented awakening’: how The Body Shop influenced generations
It is understood the buyer is Alma24, a company controlled by Friedrich Trautwein, an executive who has close links to Aurelius. Alma24 is also understood to have taken control of The Body Shop in Japan and Ireland.
Staff said they had been told that all 60-plus stores and the head office in Germany, where the business employs almost 400 people, were likely to close. An insolvency specialist, Dr Biner Bähr at the law firm White & Case, has been appointed to handle the German business.
Workers in Belgium, where the chain has about 16 stores and 50 employees, are also understood to have been told on Friday morning that administrators were to be appointed.
One source said: “The actions being taken may not be wrong but it is how it is being done that is breaking people’s hearts. People are being told with no notice: ‘You work for an unnamed family company,’ when some of these people have been with the company for years, some 30 years. It is so painful.”
Sources said The Body Shop’s operations in Ireland, Austria and Luxembourg, which together have about 20 stores and more than 100 staff, were also expected to be put into administration shortly. The Austrian and French websites were not operating on Friday.
The problems at The Body Shop’s international divisions mark the latest blow to the group, which has had three owners since it was sold by its founder, Anita Roddick, shortly before her death in 2006.
Roddick, who set up the business in Brighton in 1976 to help support her two daughters, campaigned against animal testing of cosmetics and promoted natural products sourced ethically in a way that would support vulnerable communities around the world.
She shocked fans of the brand by selling up to L’Oréal, the cosmetics giant that owns Maybelline and Garnier, for £652m. The brand was then sold on to the Brazilian natural cosmetics group Natura, which already owned Australia’s Aesop beauty brand, for €1bn in 2017. After Natura built up debts in buying the Avon home-selling cosmetics group, it quickly sold off Aesop and then The Body Shop.
Aurelius agreed to pay £207m for The Body Shop in November last year and took control in January. It only paid £117m upfront, with a further £90m “earn-out” that would only be paid if The Body Shop reached certain financial goals. With large parts of the business now sold off and expected to close, it is not clear if those goals will be reached.
It is understood that the status of a number of countries, including France, Spain and Sweden, is unclear as the directors in those countries have not signed documents finalising transfer of ownership.
The group’s operations in Canada and Australia, which have been successful, are expected to remain open.
One well-placed source said: “We don’t understand today who is the owner and who is responsible for people.”
Aurelius is the main creditor to the UK arm of The Body Shop and so is expected to buy back a downsized version of the business – with as few as 100 stores – from administrators.
Shortly after buying the business, Aurelius made loans to the group that were secured against intellectual property assets and shares in its Canadian arm, as first reported by the Financial Times. This arrangement effectively gives the group control over key assets, making rival bids unlikely.
Alma24 and Aurelius have been contacted for comment.
Dealmaker behind disastrous Body Shop buyout makes abrupt exit
Luke Barr
Sat, 17 February 2024
The Body Shop went into administration earlier this week, putting around 2,000 jobs at risk - Gareth Fuller/PA
A dealmaker who helped to spearhead the private equity takeover of The Body Shop has left abruptly after the retailer collapsed just three months later.
Aurelius, the German buyout specialist – where Peter Wood had held the position of managing director – is facing criticism over the £207m deal, which saw it become top creditor to The Body Shop before its insolvency.
The chain is now being run by administrators from FRP and bracing for a wave of store closures and job losses.
It is understood that after completing its acquisition in January, Aurelius discovered The Body Shop’s finances were in a much worse state than expected, sparking urgent discussions over what went wrong during the company’s due diligence process.
At the time of the deal’s announcement three months ago, Mr Wood, who joined Aurelius in January 2018, said on social media that he was excited “to bring the company back to its former glory”.
This came after the company said in November that it wanted to “re-energise the business” and “drive operational improvements.”
A person close to Aurelius said: “The business was found to be in a much worse financial position than it expected it to be.
“The deal was completed on January 1. Within a couple of weeks, they knew it was in a very different situation.”
However, questions have been raised over the nature of Aurelius’ cut-price takeover, as more than 2,000 jobs are at risk.
Aurelius is facing questions over an alleged failure to make payments worth £3m to a group of around 20 former employees in January, which was reportedly part of the agreement struck with The Body Shop’s former owners Natura.
It is understood that Aurelius invested less than £20m of equity in the deal, as Natura sold the business at a significant reduction compared to the £870m it paid in 2017.
A senior retail source with knowledge of The Body Shop said the failed payments to former staff represent the “unacceptable face of capitalism, the very extreme end of private equity”.
A person close to Aurelius rejected the claims and said the payments would be treated like any other financial obligation by the administrator.
Aurelius is understood to be in pole position to reclaim The Body Shop’s assets if no bidder materialises. The firm’s status as top creditor means it holds sway over the business’s future if it is not sold.
The retailer’s UK stores will remain open while administrators at FRP attempt to restructure the business and products will continue to be sold online.
In a statement last week, the administrators said: “The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector.
“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 Body Shop was founded by Dame Anita Roddick in Brighton in 1976 - Johnny Green/PA
Founded in Brighton in 1976 by Dame Anita Roddick, an environmental activist, The Body Shop was widely credited for bringing ethical – or “cruelty-free” – beauty products to a mainstream audience.
However, in recent years, the retailer has struggled with flagging sales and increased competition from newer rivals on the high street such as Lush and Rituals in the UK.
The company’s most recent accounts show that The Body Shop posted a loss of £71m in 2022, down from a £10m profit, which came while the business was still owned by the Brazilian cosmetics group Natura.
Natura called 2022 “the most difficult year in the history of The Body Shop”.
Its latest troubles have also led to The Body Shop’s German business filing for bankruptcy, where around 350 people are employed across 66 shops.
Meanwhile, the collapse of its UK arm has left landlords, which include shopping centre owner Land Securities and Network Rail, bracing for closures. The Body Shop’s future on UK high streets is uncertain.
Aurelius declined to comment.
Mr Wood, who resigned from Aurelius, was contacted for comment.
The Body Shop’s fair trade suppliers left with ‘more than $1m’ of ingredients
Sarah Butler
Sun, 18 February 2024
Shea butter being prepared by fair trade suppliers to The Body Shop
Luke Barr
Sat, 17 February 2024
The Body Shop went into administration earlier this week, putting around 2,000 jobs at risk - Gareth Fuller/PA
A dealmaker who helped to spearhead the private equity takeover of The Body Shop has left abruptly after the retailer collapsed just three months later.
Aurelius, the German buyout specialist – where Peter Wood had held the position of managing director – is facing criticism over the £207m deal, which saw it become top creditor to The Body Shop before its insolvency.
The chain is now being run by administrators from FRP and bracing for a wave of store closures and job losses.
It is understood that after completing its acquisition in January, Aurelius discovered The Body Shop’s finances were in a much worse state than expected, sparking urgent discussions over what went wrong during the company’s due diligence process.
At the time of the deal’s announcement three months ago, Mr Wood, who joined Aurelius in January 2018, said on social media that he was excited “to bring the company back to its former glory”.
This came after the company said in November that it wanted to “re-energise the business” and “drive operational improvements.”
A person close to Aurelius said: “The business was found to be in a much worse financial position than it expected it to be.
“The deal was completed on January 1. Within a couple of weeks, they knew it was in a very different situation.”
However, questions have been raised over the nature of Aurelius’ cut-price takeover, as more than 2,000 jobs are at risk.
Aurelius is facing questions over an alleged failure to make payments worth £3m to a group of around 20 former employees in January, which was reportedly part of the agreement struck with The Body Shop’s former owners Natura.
It is understood that Aurelius invested less than £20m of equity in the deal, as Natura sold the business at a significant reduction compared to the £870m it paid in 2017.
A senior retail source with knowledge of The Body Shop said the failed payments to former staff represent the “unacceptable face of capitalism, the very extreme end of private equity”.
A person close to Aurelius rejected the claims and said the payments would be treated like any other financial obligation by the administrator.
Aurelius is understood to be in pole position to reclaim The Body Shop’s assets if no bidder materialises. The firm’s status as top creditor means it holds sway over the business’s future if it is not sold.
The retailer’s UK stores will remain open while administrators at FRP attempt to restructure the business and products will continue to be sold online.
In a statement last week, the administrators said: “The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector.
“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 Body Shop was founded by Dame Anita Roddick in Brighton in 1976 - Johnny Green/PA
Founded in Brighton in 1976 by Dame Anita Roddick, an environmental activist, The Body Shop was widely credited for bringing ethical – or “cruelty-free” – beauty products to a mainstream audience.
However, in recent years, the retailer has struggled with flagging sales and increased competition from newer rivals on the high street such as Lush and Rituals in the UK.
The company’s most recent accounts show that The Body Shop posted a loss of £71m in 2022, down from a £10m profit, which came while the business was still owned by the Brazilian cosmetics group Natura.
Natura called 2022 “the most difficult year in the history of The Body Shop”.
Its latest troubles have also led to The Body Shop’s German business filing for bankruptcy, where around 350 people are employed across 66 shops.
Meanwhile, the collapse of its UK arm has left landlords, which include shopping centre owner Land Securities and Network Rail, bracing for closures. The Body Shop’s future on UK high streets is uncertain.
Aurelius declined to comment.
Mr Wood, who resigned from Aurelius, was contacted for comment.
The Body Shop’s fair trade suppliers left with ‘more than $1m’ of ingredients
Sarah Butler
Sun, 18 February 2024
Shea butter being prepared by fair trade suppliers to The Body Shop
Photograph: The Body Shop International
The Body Shop’s fair trade suppliers who work with vulnerable people from the Amazon to Africa say they have been left with more than $1m worth of beauty ingredients that may now never be ordered or paid for by the ethical beauty chain.
The retailer, which called in administrators to its UK arm last week, has partnerships with 18 community fair trade partnerships around the world via its own scheme. Many of the relationships have been in place for more than 20 years.
Several told the Guardian they could be left with hundreds of thousands of dollars of stock – a figure that may not be large by corporate standards, but suppliers said it was very meaningful to families living on low incomes in often remote areas.
The Body Shop’s UK arm continues to trade as usual, administrators from the accounting firm FRP said, and creditors will be kept informed as the process moves forward.
However, any supplier debts will be lined up behind many other creditors – and orders could shrink if the stores are closed.
Aurelius, the restructuring specialist that bought Body Shop for £207m in a deal finalised last month, is understood to be the main creditor with a secured debt which will ensure it gets paid. It is expected to take back the chain, but only after many shops have closed.
The future of the group’s Irish, mainland European and Japanese divisions also hangs in the balance. The German business was put into insolvency last week.
Several community suppliers told the Guardian they had no written contract with The Body Shop, but had produced an agreed amount of product for the business for many years.
Gaston Vizcarra, president of Candela Peru – which has been providing Brazilian nut oil for The Body Shop since 1998 from nuts collected by 400 local families in the Amazon – said there was a $0.5m inventory of oil on hold for the retailer. “We don’t have any debt, but for more than two years we have manufactured this oil ready to go. There is no contract. It is based on trust.
“We usually sell a certain volume but The Body Shop has not been buying for at least a year. It has affected our capacity to work with producers and buy nuts from them.”
Most of the fair trade community projects do not supply The Body Shop directly. They sell their ingredients to intermediaries such as oil refiners or one of the group’s 20-plus cosmetics and beauty product manufacturers.
The producers are concerned that if manufacturers are not paid by administrators to The Body Shop, they in turn will not be paid.
“It’s a worry,” said the head of one community producer group based in Africa which works of thousands of individuals. “We are all affected, whatever the changes coming up. It is going to affect the whole supply chain.”
Mayk Arruda from CoppalJ, a Brazilian cooperative working with local communities that produces oil from the Babassu palm which grows in the Amazon, said it had just received an order for 30 tonnes of oil worth more than €300,000 and was concerned that it may not be paid.
“We work with 258 families directly and can impact more than 1,000,” he said. “If we are not paid, we are going to face a big problem. It is very important for us to generate a good quality of life.”
He said the higher price paid for the oil by The Body Shop had generated a “revolution in families’ lives” and there was a concern “that we will lose [that].”
Nick Hoskyns has supplied The Body Shop with sesame oil from the Juan Francisco Paz Silva cooperative in Nicaragua since 1993. The group works with 270 families. It has about $300,000 of sesame oil in stock that was produced without a contract.
“We have a relationship of trust and exclusivity of over 30 years which has been more than a contract. A break in trust has happened with Aurelius. There has been a sort of cultural bucket of water being poured over us.
“How can this happen to such an amazing company that has done so much?”
Some fair trade suppliers deal directly with The Body Shop and so may miss out on payments as they will be in line behind secured creditors, such as Aurelius, in the UK arm’s administration.
Milan Dev Bhattarai is the founder of Get Paper Industries in Nepal, which has been providing handmade recycled paper packaging to The Body Shop since 1989 via a partnership brokered by The Body Shop’s founder, Anita Roddick.
Dev Bhattarai said the company was not owed money but he added: “If there are closures of The Body Shop UK, not only more than 500 producers will have negative impact in their lives, but hundreds of girls will lose the opportunity for education, thousands of children will miss the opportunities for improved school. People of local communities will lose health support and many girls might be trafficked for difficult life. Tree plantation will be disturbed.”
The Body Shop’s fair trade suppliers who work with vulnerable people from the Amazon to Africa say they have been left with more than $1m worth of beauty ingredients that may now never be ordered or paid for by the ethical beauty chain.
The retailer, which called in administrators to its UK arm last week, has partnerships with 18 community fair trade partnerships around the world via its own scheme. Many of the relationships have been in place for more than 20 years.
Several told the Guardian they could be left with hundreds of thousands of dollars of stock – a figure that may not be large by corporate standards, but suppliers said it was very meaningful to families living on low incomes in often remote areas.
The Body Shop’s UK arm continues to trade as usual, administrators from the accounting firm FRP said, and creditors will be kept informed as the process moves forward.
However, any supplier debts will be lined up behind many other creditors – and orders could shrink if the stores are closed.
Aurelius, the restructuring specialist that bought Body Shop for £207m in a deal finalised last month, is understood to be the main creditor with a secured debt which will ensure it gets paid. It is expected to take back the chain, but only after many shops have closed.
The future of the group’s Irish, mainland European and Japanese divisions also hangs in the balance. The German business was put into insolvency last week.
Several community suppliers told the Guardian they had no written contract with The Body Shop, but had produced an agreed amount of product for the business for many years.
Gaston Vizcarra, president of Candela Peru – which has been providing Brazilian nut oil for The Body Shop since 1998 from nuts collected by 400 local families in the Amazon – said there was a $0.5m inventory of oil on hold for the retailer. “We don’t have any debt, but for more than two years we have manufactured this oil ready to go. There is no contract. It is based on trust.
“We usually sell a certain volume but The Body Shop has not been buying for at least a year. It has affected our capacity to work with producers and buy nuts from them.”
Most of the fair trade community projects do not supply The Body Shop directly. They sell their ingredients to intermediaries such as oil refiners or one of the group’s 20-plus cosmetics and beauty product manufacturers.
The producers are concerned that if manufacturers are not paid by administrators to The Body Shop, they in turn will not be paid.
“It’s a worry,” said the head of one community producer group based in Africa which works of thousands of individuals. “We are all affected, whatever the changes coming up. It is going to affect the whole supply chain.”
Mayk Arruda from CoppalJ, a Brazilian cooperative working with local communities that produces oil from the Babassu palm which grows in the Amazon, said it had just received an order for 30 tonnes of oil worth more than €300,000 and was concerned that it may not be paid.
“We work with 258 families directly and can impact more than 1,000,” he said. “If we are not paid, we are going to face a big problem. It is very important for us to generate a good quality of life.”
He said the higher price paid for the oil by The Body Shop had generated a “revolution in families’ lives” and there was a concern “that we will lose [that].”
Nick Hoskyns has supplied The Body Shop with sesame oil from the Juan Francisco Paz Silva cooperative in Nicaragua since 1993. The group works with 270 families. It has about $300,000 of sesame oil in stock that was produced without a contract.
“We have a relationship of trust and exclusivity of over 30 years which has been more than a contract. A break in trust has happened with Aurelius. There has been a sort of cultural bucket of water being poured over us.
“How can this happen to such an amazing company that has done so much?”
Some fair trade suppliers deal directly with The Body Shop and so may miss out on payments as they will be in line behind secured creditors, such as Aurelius, in the UK arm’s administration.
Milan Dev Bhattarai is the founder of Get Paper Industries in Nepal, which has been providing handmade recycled paper packaging to The Body Shop since 1989 via a partnership brokered by The Body Shop’s founder, Anita Roddick.
Dev Bhattarai said the company was not owed money but he added: “If there are closures of The Body Shop UK, not only more than 500 producers will have negative impact in their lives, but hundreds of girls will lose the opportunity for education, thousands of children will miss the opportunities for improved school. People of local communities will lose health support and many girls might be trafficked for difficult life. Tree plantation will be disturbed.”
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