New owner Aurelius first in line for payout as The Body Shop enters administration
The Body Shop owner Aurelius is first in line for a payout after putting the UK business into administration, despite previously pledging to "re-energise" the brand with a "strong turnaround strategy".
The private equity firm is set to leave other parties with losses after it secured its position as the brand’s top creditor before going on to break-up the business, according to The Times.
Dame Siobhain McDonagh, a Labour MP on the Commons’ Treasury select committee, said: "Just before Christmas, Aurelius released a statement saying they would ‘re-energise the business’ and ‘deliver the next chapter of success’.
"Less than three months later they are putting the brand into liquidation and look like they are first in line to be paid. You have to question their sincerity. Did they ever intend to grow the business?
"The same statement said that The Body Shop has been a pioneer in corporate social responsibility. If they want to live up to that, they had better put their shop and office staff first before paying out to themselves. There are more than 2,000 jobs at risk and I want to see them protected before private equity firms profit from this deal."
Aurelius, which specialises in buying and turning around troubled firms, secured a £207 million deal in November 2023 to buy The Body Shop from Brazilian cosmetics giant Natura & Co.
It believed that, despite the challenging retail market, there was an opportunity to "re-energise" the business and enable it to take advantage of positive trends in the high-growth beauty market.
Last month, Aurelius offloaded parts of The Body Shop's international business in mainland Europe and Asia as it looked to deliver its "strong turnaround strategy".
However, the brand was placed into administration in the UK earlier this week, putting thousands of jobs at risk.
FRP, which was appointed as an administrator, said it will "consider all options to find a way forward for the business" after years of financial struggles and amid a challenging backdrop for shoppers.
The high street chain will continue to trade through stores and online during the administration process.
