The Body Shop announces profitable turnaround under new ownership

LONDON: The new leadership at The Body Shop has declared that the struggling ethical beauty retailer is “back for good” following a profitable start under its new ownership. The company was acquired out of administration in September by a consortium headed by British cosmetics entrepreneur Mike Jatania.

The retailer had entered administration in February, resulting in the closure of 85 UK stores. Under its new owners from the Aurea Group, led by Jatania, The Body Shop is reported to have generated a £2 million profit from £28 million in sales during its first three months of operation, reported The Guardian.

Currently, The Body Shop operates 113 outlets in the UK and employs over 1,200 people, including staff at its headquarters, which is set to relocate to a new facility in Brighton next month. Previously, the head office was divided between locations in London and Littlehampton, West Sussex, the latter being the original base established by the late founder Anita Roddick.

In a final message to employees before Christmas, which was reviewed by the Guardian, new CEO Charles Denton expressed his excitement about the company’s year-end performance. Despite challenges from Storm Darragh, he noted, “we weathered it and some.” Denton, who formerly led Molton Brown, added that the retailer exceeded its internal sales forecasts by 17%, proclaiming, “throw whatever you like at us, and we’ll come bouncing back … back for good and last month … back in profit baby!”

The Body Shop previously reported a £71 million loss for the year ending December 2022, leading to its administration in the UK just three months after being acquired by the German private equity firm Aurelius for £207 million. At that time, the company was in debt to creditors by more than £276 million.

Administrators from FRP Advisory managed the closure of UK stores, resulting in approximately 800 job losses, before the brand was acquired by Aurea. Additionally, operations in the US, Germany, and Belgium were also discontinued as those businesses were either sold or suffered from a lack of funding due to the UK parent company’s administration.

Although the company once boasted a network of 3,000 stores globally, it currently maintains operations in 83 international markets with over 1,300 outlets, the majority of which are franchised, including around 700 in Europe, 60 in Canada, and nearly 100 in Australia, as well as in India, Malaysia, Indonesia, and South Korea.

One source familiar with The Body Shop’s operations advised caution regarding interpretations of its recent profitability, noting that the company now operates on a smaller scale and that sales might have been enhanced by discounted pricing and inventory clearance. The key challenge remains how to sustain interest and innovation going forward. Founded in 1976 by Roddick, The Body Shop remained in family ownership for 30 years before being sold to the French cosmetics giant L’Oréal for £652 million in 2006. Following declines in sales and profits, L’Oréal divested the company to Brazil’s Natura in 2017. However, Natura had to sell The Body Shop in 2023 to alleviate significant debts incurred from acquiring the beauty brand Avon.