The Body Shop has been delivered from the brink of administration through a rescue deal led by cosmetics mogul Mike Jatania. This agreement safeguards 113 stores and secures more than 1,000 jobs.
The deal, organised by administrators at FRP, involves the sale of The Body Shop to a consortium managed by Jatania’s investment company, Aurea. Charles Denton, former chief of Molton Brown, will assume the role of chief executive.
New Leadership and Strategic Direction
Under the new ownership, Charles Denton, former chief of Molton Brown, will serve as chief executive. This deal, orchestrated by administrators at FRP, involves the sale of The Body Shop to a consortium headed by Mike Jatania’s investment company, Aurea. The agreement concluded after weeks of exclusive negotiations, aiming to stabilise the business that currently employs 1,300 people.
Store Relocations and Employment Stability
Although there are no immediate plans to close more stores, the new owners might consider relocating some branches. This strategy could see stores moving to more advantageous locations across various towns and cities.
This move aims to ensure that the stores are positioned to attract more customers and improve overall profitability.
A History of Financial Troubles
The journey into administration began earlier this year.
Last November saw the sale of The Body Shop to private equity firm Aurelius for £207 million. This valuation was significantly lower than the €1 billion (£870 million) that previous owner Natura had paid in 2017.
The company’s financial issues worsened when HSBC withdrew a line of credit. Aurelius failed to secure alternative funding, leading to the closure of over 80 stores.
The Auction and New Ownership
Despite being the top creditor, Aurelius was not the ultimate buyer.
An auction attracted several bidders, including Mr Jatania’s Aurea and Gordon Brothers, the turnaround specialist led by Mark Newton-Jones.
Commitment to Ethical Values and Innovation
Aurea described the acquisition as its “largest transaction to date.” Details of the investment, however, were not disclosed.
Aurea is committed to rebuilding The Body Shop and restoring its leadership in the ethical beauty sector. This market, initially pioneered by The Body Shop’s founder Anita Roddick, focuses on natural products and not testing on animals.
Under Aurea’s ownership, Jatania has pledged to invest in new, innovative products and enhance the in-store experience. Jatania will also maintain the brand’s ethical and activist foundations.
Past Successes and Challenges Ahead
Jatania has a track record of revitalising neglected cosmetic brands. He previously sold the maker of Lypsyl lip balm for nearly $200 million (£156 million) in 2013.
Denton acknowledged the challenges, stating, “We recognise that revitalising the business will require bold action and a consumer-centric, commercially agile mindset.
Industry Praise and Future Outlook
FRP’s Steve Baluchi praised the new owners. He highlighted their “long track record of successful retail turnarounds.”
Baluchi expressed confidence in the enduring value of The Body Shop’s household name and legacy.
With this rescue deal, The Body Shop seems poised for a significant revival in the ethical beauty market.
Under the guidance of its new leadership, the company aims to reclaim its position as a pioneer in natural and ethical cosmetics, ensuring a sustainable and prosperous future.
