The Body Shop

Overview 

Founded in 1976 by Anita Roddick under the principle that “business could be a force for good”, The Body Shop (TBS) went on to expand globally through a mix of standalone stores as well as a large franchise network.  

Yet troubles at the retailer accelerated in 2023, when then parent Natura &Co sought a buyer for the brand, as it focused on group profitability amid poor performances across its fascias.  

Sales in the year to end-December 2022 (FY2022) had faltered, with revenues at TBS falling 13.5% in constant currency.  

Natura &Co commented it “was the most difficult year in the history of The Body Shop. An extraordinary set of external factors significantly disrupted the business, prompting The Body Shop team to pursue the best possible outcome in very challenging circumstances”. 

Natura sold TBS to private investor Aurelius Group in a £207m deal at the close of 2023, but the retailer’s troubles did not stop there. 

Aurelius appoints administrators 

Despite only a few months ownership, Aurelius appointed FRP as administrators for the UK TBS business in February 2024 after weak trading over Christmas and early January 2024. At the time, TBS had around 200 UK stores with over 2,500 employees. 

FRP subsequently announced the planned closure of nearly half the retailer’s UK stores stating: “A reduced store footprint, will coincide with a renewed focus on the brand’s products, online sales channels and wholesale strategies.”  

By mid-2024, the retailer had just over 100 UK sites. 

Staff headcount in its head office was also culled by around 40% during the administration. FRP said “This swift action will help re-energise The Body Shop’s iconic brand and provide it with the best platform to achieve its ambition to be a modern, dynamic beauty brand that is able to return to profitability and compete for the long term.”  

In January 2024, TBS had announced the closure of its ‘The Body Shop At Home’ direct selling channel, which had been running for 30 years. A new ambassador programme was reported to be being considered to replace the division.  

The same month, Retail Week revealed that TBS signed an agreement with “an international family office to sell its business in most of mainland Europe and in parts of Asia” as it took a “decisive step towards delivering a strong turnaround strategy”.   

The sale equated to around 14% of TBS’ external global revenue.    

New owners secure financing deal 

After plans for a CVA failed, FRP put TBS up for auction with bids finalised by summer 2024.  

TBS entered an exclusivity agreement with a consortium led by Auréa group – “a leading investment platform focused on beauty, wellness and longevity” led by Mike Jatania, Paul Raphael and Andrew Vagenas - with its new management team to be led by former Molton Brown CEO Charles Denton.   

The deal was finalised in early September 2024 and saw Auréa also gain control of the retailer’s assets in Australia and North America. 

Denton worked his way up the ranks at Molton Brown, leading as chief executive until 2005. Molton Brown is a much beloved British brand, not unlike TBS - vertically integrated with its own manufacturing, operating on a global scale through both wholesale and retail. This experience will be highly valuable as he embarks on a mission to turn around the business after a period of huge instability.   

In a post via LinkedIn in July, he commented: “Over the next few weeks, we’ll work together to develop a strategic plan that sets up the business for long-term growth. If everything plays out as intended, we should emerge from administration in August. It’s time to change the narrative around this powerful brand which is loved all over the world. I am optimistic about the future and look forward to what we can achieve together. Will it be tough, absolutely, but we have all the right ingredients to succeed.” 

Sky News reported Auréa was aiming to secure working capital of approximately £30m from Hilco Capital as it seeks to stabilise the business.  

Struggles prior to Aurelius buy out 

Prior to TBS’ purchase by Aurelius, TBS former interim chief executive Ian Bickley said it was “fundamentally reassessing every aspect of its business”. This included:   

• Rebalancing its distribution channels “to meet beauty consumers where they like to shop” including digital channels and wholesale, while “better leveraging the competitive advantage” of TBS retail network.    
• Optimising its product portfolio to drive growth in the skincare category while “defending the leadership position” in bath and body, as well as all year-round gifting.   
• Reinvigorating the brand to “establish a clear point of differentiation” - TBS planned to “refocus” on its marketing efforts to “fuel brand heat”, as well as driving a social-first strategy through digital and CRM, with focused investment in its tier one markets like the UK. It will also create a more streamlined and agile data-driven operating model to speed decision making and drive results.  

Previous initiatives under Natura 

Problems had persisted at the retailer since its acquisition by L’Oréal Group in 2006 in a £652m deal. Many believed the brand lost its identity during this period, with L’Oréal eventually divesting itself of the retailer to Brazilian B-Corp Natura &Co in a €1bn (£877m) deal in 2017.  

Under Natura &Co, TBS forged ahead with its transformation plan, relaunching its ecommerce platform at the height of the pandemic with continued investment through 2021 to improve its digital capabilities.   

An overhaul of its stores saw its Activist Workshop format installed in over 800 stores around the world by the end of FY2022. These new concept stores use sustainable materials wherever possible as well as housing refill stations and an activist corner where customers can make suggestions and sign up to causes. 

In May 2022, TBS announced the launch of a ‘Youth Collective’ aiming to back the views of the younger generation.    

It is made up of a group of under 30s within TBS and other B Corp organisations, who are consulted by senior leadership on business decisions. TBS stated that it “will make sure that we are amplifying young people’s voices within our business, while also pushing us to look at the way we do things in a new way”.