The Body Shop Terminating All US Operations and Closing Multiple Stores in Canada After Bankruptcy Filing

Kos Temenes
By Kos Temenes
March 11, 2024Business News
The Body Shop Terminating All US Operations and Closing Multiple Stores in Canada After Bankruptcy Filing
A sign is pictured above the entrance to a branch of The Body Shop in central London on February 12, 2024. The Body Shop, the near 50-year-old cosmetics company renowned for its ethical hair and skin products, is near bankrupt in the UK after poor Christmas trade, according to reports in British media. (Photo by Daniel LEAL / AFP) (Photo by DANIEL LEAL/AFP via Getty Images)

UK-based cosmetics retailer The Body Shop has terminated all operations in the United States this month as it files for bankruptcy. Additionally, the company is closing dozens of store locations in Canada.

The company announced earlier this month that all operations from its U.S. subsidiary will cease effective March 1. Just over one-third of its 105 stores in Canada will proceed with closing-down sales with immediate effect. Although all Canadian locations will remain open for the time being, some will be closing in the not-too-distant future, as reported by CNN.

All online e-commerce operations in Canada will also be terminated, according to a news release on March 1.

The company, along with many other retailers, have suffered greatly through ever-increasing inflation in recent years. This was particularly so for traditional retailers, which aimed to cater for a struggling middle class.

The Body Shop, which generally occupied locations in shopping malls, was founded in the UK by human rights activist and environmental campaigner Anita Roddick in 1976.

The company’s ethos specifically focused on not distributing cosmetics that were tested on animals, which applied to a large number of its products and made the company one of the pioneers for ethical and sustainable products, which it branded “cruelty-free.”

In 2019, it received a “B Corp” certification, which is issued to companies that meet certain transparency and environmental criteria.

Ms. Roddick, who was made a Dame Commander of the Order of the British Empire in 2003, died in 2007 from an acute brain hemorrhage after battling with cirrhosis of the liver following a hepatitis C infection she contracted several years earlier.

The Body Shop grew to become a successful household brand and had opened over 2,500 retail locations in more than 80 countries by 2023. Its online stores operated in more than 60 markets across the world.

The company has changed ownership several times, most recently to private equity group Aurelius in 2023 for around $260 million.

Prior to this, it was sold to Brazilian cosmetics group Natura for around one billion dollars in 2017, after Roddick initially sold the company to cosmetics giant L’Oréal in 2006 for around the same amount, in a move that some die-hard customers described as a betrayal of its values.

Despite its initial success and high ethical standards, the brand has been in decline in recent years. According to the company’s 2023 financial report, Natura reported a more than 13 percent drop in sales in 2022, a year that Natura described as difficult for the brand.

While Natura facilitated the redesign of the company’s stores, in addition to introducing a refill service, the company did not emerge from its financial difficulties.

While direct-to-consumer sales initially surged during the pandemic, the company was unable to recover its ongoing losses when sales normalized to pre-pandemic levels afterward.

NTD contacted The Body Shop and Aurelius for further information but did not receive a response by press time.

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