The Body Shop plans to reduce its workforce by 300 positions at their main office, and potentially shut down almost half of their UK-based stores, leading to the loss of hundreds more jobs. This is in response to the company’s struggle to stay afloat.
On Tuesday, administrators informed employees that seven stores would shut down immediately and more may follow. Additionally, the number of employees at the company’s offices in London and Littlehampton would be reduced by 40%, from 600 to 400. It is uncertain if there will be any impact on jobs at the company’s warehouse, also located in Littlehampton.
The company, with over 2,200 employees in the UK, brought in administrators last week, just under two months after being acquired by restructuring specialist Aurelius.
Seven stores will close on Tuesday: Surrey Quays in London, Oxford Street near Bond Street in London, Canary Wharf in London, Cheapside in London, Nuneaton in Warwickshire, Ashford Town Centre in Kent, and Bristol Queens Road.
The administrators in charge of The Body Shop, Tony Wright, Geoff Rowley, and Alastair Massey from FRP, stated that after careful assessment, they have determined that the current combination of stores is not sustainable due to years of financial losses. As a first measure, seven stores will shut down today and more closures are expected in the future. It is predicted that after the restructuring process, over half of The Body Shop’s 198 stores in the UK will remain in operation.
The brand will decrease the number of stores and shift its attention to its products, online sales, and wholesale plans. This will align the brand with other companies in the industry and help it regain financial stability.
The retailer’s stores currently employ 1,600 individuals, meaning that approximately 800 positions could be eliminated if the company decides to close half of its locations.
The management announced that reducing jobs at the main office was a step towards establishing a progressive plan and a more adaptable, financially sustainable framework. They also stated that taking quick measures would revitalize The Body Shop’s renowned image. Furthermore, they emphasized that maintaining strong partnerships with crucial franchise and wholesale associates in Asia, the Middle East, and Europe would be crucial for future achievements.
The employees were informed that they must seek compensation from the Redundancy Payments Service, which is supported by the government. This applies to those who have been working at the ethical business for many years.
Aurelius is recognized as the primary creditor, holding a secured debt which guarantees payment before other creditors. They are anticipated to regain control of the chain, but only after numerous stores have shut down and layoffs have occurred.
Aurelius purchased The Body Shop for an initial sum of £117m in a deal that was made in November and completed in early January.
The fate of the group’s Irish, mainland European, and Japanese sectors is uncertain following their acquisition by a company named Alma24, whose primary director has strong connections to Aurelius. The German branch of The Body Shop, which operates approximately 60 stores, was declared insolvent last week, and employees in Belgium, where there are 16 stores, have been informed that they are also facing insolvency.
Ignore the newsletter advertisement.
after newsletter promotion
The fair trade suppliers of The Body Shop collaborate with local communities of growers and producers in regions such as the Amazon and Africa. They have reported having over $1 million (£790,000) worth of beauty ingredients that may go unused or unpaid by the beauty chain.
The ownership of The Body Shop has changed hands three times since its founder, Anita Roddick, sold the company shortly before her passing in 2007.
In 1976, Roddick founded a business in Brighton that advocated against animal testing for cosmetics. They also promoted ethically-sourced natural products to support small producers globally.
The brand’s fans were surprised when she sold it off to L’Oreal, a cosmetics company that also owns Maybelline and Garnier, for £652m.
The company was subsequently acquired by the Brazilian company Natura, known for its natural cosmetics. Natura had previously purchased the Australian beauty brand Aesop, for €1 billion in 2017. However, after accumulating debts from the acquisition of the home-selling cosmetics company Avon, Natura promptly sold off Aesop and The Body Shop.
Source: theguardian.com
