The Body Shop’s suppliers, including small charities, local councils and cosmetics manufacturers, are to receive no more than about a quarter of the £219 million ($284 million) owed to them when the ethical beauty retailer fell into administration, a report has said.
The retailer, founded by Anita Roddick in 1976, now operates about 113 UK stores after it was rescued from administration by a consortium led by the British cosmetics tycoon Mike Jatania in September last year, saving 1,300 jobs.
However, more than 80 British stores were closed with the loss of more than 750 jobs in branches and head office after the German restructuring specialist Aurelius put the Body Shop’s UK arm into administration in February 2024, less than three months after taking control from the Brazilian group Natura.
Stores also closed overseas, including in the US, Canada and Germany, as the overseas divisions were hit by the collapse of the parent group.
In their latest update on progress, administrators from FRP revealed that Jatania’s Aurea Group paid at least £44.3 million for the retailer.
They said UK tax authorities would be paid in full from the proceeds of the administration and workers would receive holiday pay owed. However, unsecured creditors, such as suppliers, charities and landlords, who were owed £219 million in total, would receive only between 16 percent and 27 percent of the money owed.
At the time of its collapse, administrators said unsecured creditors included Children on the Edge, a children’s rights organisation working in countries including Bangladesh and Uganda; E-Cycle, a Welsh IT recycling service that employs disabled people; MindOut, a Brighton-based mental health group; and the organic certification body Ecocert.
The Body Shop also owed millions of pounds to suppliers around the world; the was most owed to Avon, the struggling cosmetics group owned by the Body Shop’s former parent company Natura, at just over £13 million for products it manufactured.
The retailer’s former owner Aurelius did not receive any payment.
At the time of its collapse, administrators said the Body Shop’s debts totalled more than £276 million, of which £6.3 million was tax owed, £44 million was money owed to trade creditors, £63 million from lease liabilities and other borrowing and £143 million to “related suppliers” understood to be other parts of the business.
The group is now run by the former Molton Brown boss Charles Denton, who said the business had achieved a profit in its first 100 days.
The company, which once had 3,000 shops worldwide, continues to operate in 83 overseas markets with more than 1,300 outlets. Most of those stores are operated by franchise partners, including about 700 in Europe, 60 in Canada and nearly 100 in Australia, as well as India, Malaysia, Indonesia and South Korea.
By Sarah Butler
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The body care maker reportedly made a $2.5 million profit on $34.5 million in sales in the first three months under its new owners, Aurea Group, which acquired it out of administration in September.
