The Body Shop, a once-thriving British high-street retailer, has appointed administrators for its UK arm, three months after its acquisition by private equity owner Aurelius, signalling a tumultuous period for the iconic brand.
Founded in 1976 by Anita Roddick and her husband Gordon, The Body Shop was a pioneer in ethical consumerism. The brand championed cruelty-free products and challenged conventional beauty standards, resonating with consumers worldwide.
Tash Van Boxel, analyst at leading data and analytics company GlobalData, emphasises the fact that increased competition means the company’s ethical values have now become the industry norm, thus minimising its "distinct brand identity".
“The Body Shop’s success in the past was down to its distinct brand identity, with its focus on natural ingredients and fair-trade products being at the fore of its marketing, making the retailer ahead of its time.
"While The Body Shop continues to stand by its ethical and cruelty-free brand values, these claims have become industry standards, weakening The Body Shop’s point of difference. Indeed, not only are brands now offering products with similar claims, but they also bring more to the table to attract shoppers.”
The L'Oreal era
In 2006, L'Oreal acquired The Body Shop for £652m ($818.4m), a move that raised questions about the brand's alignment with its ethical roots.
Despite continued international growth, The Body Shop faced increased competition and a changing retail landscape.
The Natura acquisition
In 2017, Natura acquired The Body Shop from L'Oreal for £877m, aiming to revitalise the brand.
However, challenges persisted, exacerbated by the Covid-19 pandemic and increased competition from brands such as Lush.
The Aurelius ownership
In November 2023, Aurelius acquired The Body Shop for £207m, signalling a new chapter for the brand.
Despite initial plans to re-energise the company, financial challenges persisted, leading to the appointment of administrators for the company's UK arm.
The move comes after the company faced financial challenges and insufficient working capital, leading to poor trading performance.
Looking ahead
FRP Advisory has been appointed to oversee the administration of The Body Shop's UK business.
The company will continue to trade as normal during this period, with a focus on securing its future.
Van Boxel highlights that The Body Shop has been unable to keep up with rivals as the UK health and beauty market rises.
“Unable to keep up with its rivals, The Body Shop’s demise into administration comes as a result of increased competition in a thriving health and beauty market.
“Indeed, GlobalData forecasts that the UK health & beauty market rose 7.1% in 2023, with this sector holding up well throughout the cost-of-living crisis as consumers continued to indulge themselves with inexpensive treats.
"However, while the likes of Boots and Superdrug have outperformed the market and taken advantage of this heightened demand, The Body Shop has lagged behind as its once clear brand stance has become lost,” said Van Boxel.
