The Body Shop’s US and Canadian arms have filed for bankruptcy despite being profitable after the beauty retailer’s UK business went into administration last month.
The US and Canadian branches of The Body Shop have filed for bankruptcy after its UK branch fell into administration creating a cash shortage for most of the retailer’s overseas businesses.
On Saturday, The Body Shop US filed for insolvency as it stopped trading at 50 stores across the country, putting 400 jobs at risk. This includes jobs at its distribution centre, which fulfils orders for all its North American operations and still holds inventory.
The retailer’s Canadian arm shut 33 of its 105 stores, leading to 200 redundancies, as cash shortages and the ceasing of US operations had a direct effect on the business.
The news comes after The Body Shop’s UK arm appointed FRP Advisory as administrators to restructure its business in the country. At the time, the retailer said this would not have an effect on its overseas businesses, adding that the US and Canada are key profitable markets.
The Body Shop’s Australian branch may be headed for a similar fate as it struggles to cover large debts after access to funds was cut off. The Body Shop has 100 stores in Australia and 20 in New Zealand.
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