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The Body Shop, a cosmetics and skincare chain owned by private equity firm Aurelius, appointed receivers on Tuesday (13 February) as its UK operations went into bankruptcy proceedings, with more than 2,000 jobs and 200 stores in crisis.
From stores all over the world to bankruptcy proceedings, what happened to this well-known old brand?
In the face of a large number of competitors, it did not move forward.
Over the years, The Body Shop has changed hands from one owner to another. This past Christmas, it struggled in a challenging economic environment, unable to shake off declining sales and sluggish revenues. This was perhaps the last straw for its UK operations to be declared bankrupt.
Diane Wehrle, CEO of Rendle Intelligence and Insights and retail expert, believes that over the past 20 years, a large number of competitors have entered the sustainability space that The Body Shop once had the exclusive preserve of.
The Body Shop itself hasn't really developed its concept, but all the competitors are emerging behind it, not only with sustainability advantages, but also with some very beautiful brands. The Body Shop isn't in recession, but it's not moving forward. ”
Founded in 1976 with a principal of 4,000 pounds.
Founded in 1976 by Anita Roddick, The Body Shop started as a small shop in the south coast town of Brighton in England with £4,000 (about S$6,768).
In 1984, the hugely popular The Body Shop was listed on the London Stock Exchange at a valuation of £80 million.
In 2006, Roddick and her husband divested their business to beauty giant L'Oreal for more than £650 million, but the latter's philosophy seemed to be the polar opposite of The Body Shop's purpose.
More than 10 years later, L'Oréal decided to sell The Body Shop to Natura in Brazil for £880 million. Fast forward to November 2023, Natura sold The Body Shop to private equity firm Aurelius for an estimated sale price of just £200.7 million.
It is still unlikely to disappear completely after entering bankruptcy proceedings.
At this stage, it is too early to say where The Body Shop's 200 stores in the UK will go, but it is certain that many will be forced to close to cut costs, which will lead to the loss of some of the company's employees.
However, The Body Shop is unlikely to disappear entirely, and it may continue to operate some stores in the UK and invest in an online business instead.
So far this year, the global economy has faced a lot of uncertainties, and the wave of corporate layoffs has been surging and in addition to traditional retail stores such as The Body Shop, big tech companies such as Google, Amazon and Microsoft have also announced layoffs.
Against the backdrop of rising business costs, still high inflation and interest rates, and geopolitical instability, it remains to be seen whether more companies will lay off workers or become unable to operate next.