Is Body Shop U.K. going bankrupt?

The Body Shop is preparing to appoint administrators for its UK operations, a move that could lead to job losses and the closure of some stores.

Reports suggest that Aurelius, the owner of the cosmetics retailer, is in talks with restructuring specialist FRP Advisory to oversee the insolvency process. The aim is to address financial challenges, including weak trading during the festive season and early January, as well as insufficient working capital.

Aurelius acquired The Body Shop in November 2023 for £207 million, a fraction of the price paid by previous owners Natura & Co in 2017. Despite efforts to revitalise the business, ongoing financial struggles have prompted the need for restructuring.

As part of the process, administrators may consider closing some of The Body Shop's 200-plus stores in the UK to cut costs. However, it's important to note that the administration process is expected to primarily impact the company's UK operations and not its global franchise partners.

In a separate development, Aurelius recently sold parts of The Body Shop's Europe and Asia business to an undisclosed family office. This move aligns with the firm's broader strategy to strengthen the brand's presence in key markets and deliver a robust turnaround plan.

Meanwhile, former owner Natura & Co has raised concerns about unpaid bonuses owed to former employees following the sale of The Body Shop. It's reported that more than 20 former employees are seeking up to £3 million in outstanding bonuses.

The situation underscores the challenges facing The Body Shop as it navigates financial difficulties and seeks to reposition itself in the market.