Financial struggles lead to closure of retail stores and online sales
The Body Shop, a renowned UK-based cosmetics firm, has announced bankruptcy proceedings, resulting in the closure of all its operations in the United States and imminent shutdowns of numerous Canadian stores. The company, founded by human rights activist and environmental campaigner Anita Roddick in 1976, has faced insurmountable financial challenges, culminating in this significant development reported on Monday.
Earlier this month, The Body Shop made an official statement declaring the cessation of its US subsidiary’s operations, effective March 1. Furthermore, the company disclosed plans to initiate liquidation sales at 33 out of its 105 stores in Canada, while discontinuing online sales via its Canadian e-commerce platform. However, it clarified that all Canadian brick-and-mortar locations will continue to operate for the time being.
The reported cause of the company’s downfall stems from the impact of high inflation in recent years, particularly affecting traditional retailers predominantly situated in malls and catering to the middle-class demographic.
The Body Shop gained international recognition for its commitment to offering natural, sustainable, ethical, and cruelty-free products. It notably became one of the pioneers in prohibiting animal testing for many of its cosmetic items. In 2019, the company achieved certification as a “B Corp,” meeting specific transparency and environmental conscientiousness standards.
Despite its initial success, The Body Shop faced a series of ownership changes over the years. Acquired by cosmetics giant L’Oreal in 2006 for over a billion dollars, it was subsequently sold to Brazilian company Natura in 2017 for a similar amount. However, amidst financial struggles and declining performance, Natura reported a 13.5 percent year-over-year decline in 2022 for The Body Shop. Consequently, in late 2023, the brand was sold to asset management group Aurelius for approximately $266 million.
