The Body Shop, a popular beauty retailer, is set to close up to half of its 198 stores in the UK resulting in mass job losses, as well as reducing the size of its head office to re-energise the brand. The administrators overseeing the restructuring of the company have said that store closures will begin immediately, however, the remaining chain’s shops and website will continue to trade normally during the restructuring process. The UK operation of The Body Shop was put into administration last week as a result of under-performance over the festive period, which was “worse than [their] worst-case assumptions”, prompting Aurelius, the German private equity firm, to buy the company in a £207m deal at the end of last year, and subsequently to call in administrators. Aurelius is The Body Shop’s main secured creditor, and as such, is expected to be in pole position to take back control of the retailer.
The restructuring plan includes reducing the store footprint and head office staff by around 40%, as well as discontinuing the Body Shop’s Ambassador Programme, which allows representatives to directly sell the firm’s products to customers. The restructuring plan will allow The Body Shop to focus on online sales channels and wholesale strategies as a part of a “more nimble, financially viable model” following the earlier sale of loss-making businesses in mainland Europe and Asia. The stores which are immediately affected are the ones that have the highest overheads, including four shops in London. Nonetheless, more than half of The Body Shop’s 198 UK stores will remain open after the restructuring.
The Body Shop was founded by Dame Anita Roddick and her husband in 1976, and is known for rejecting animal testing on cosmetics, promoting environmentally-friendly products and ethical sourcing practices. In 2006, L’Oreal, the French beauty giant, acquired The Body Shop, which led some of its original customer base to view the move as a sell-out. However, the firm has faced increasing competition, in particular from high street rival Lush, which was co-founded by Mark Constantine, who used to be a supplier to The Body Shop. The restructuring plan is expected to help The Body Shop shift its focus towards a more modern, streamlined business model, which is crucial to its long-term success
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