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Taxpayers to cover redundancy bill for The Body Shop staff

Sophie Smith
22 February 2024

Taxpayers are expected to pay millions of pounds to sacked staff at The Body Shop as administrators oversee the restructuring of the collapsed chain.

Employees who have been laid off at the British business have been told to make claims through the government-backed redundancy payouts service, which is funded using national insurance contributions, according to The Telegraph.

Only staff who have worked for the company for two years or more will qualify for redundancy pay. Payments are capped at around £643 a week before tax, meaning that higher earners at the business, such as those in head office, will lose out.

The Body Shop

It comes after The Body Shop's administrators confirmed a number of store closures and head office job cuts as part of a restructuring plan to "secure the future of the brand".

Following a full evaluation of The Body Shop’s UK business, administrators at FRP announced on Tuesday that the beauty brand's current store portfolio mix is "no longer viable".

The Body Shop’s stores on London’s Oxford Street and Surrey Quays, alongside Queens Road in Bristol and Ashford Town Centre in Kent were among the first stores to close this week.

It is not yet known which locations will remain open but almost half of the brand's 198 UK stores are expected to close.

The Body Shop is also restructuring roles at its Head Office, with the headcount expected to reduce by approximately 40% to a future headcount of over 400 full time employees.

"This swift action will help re-energise The Body Shop and provide it with the best platform to achieve its ambition to be a modern, dynamic beauty brand that is able to return to profitability and compete for the long term," read a statement from business advisory firm FRP earlier this week.

The Body Shop collapsed into administration in the UK last week, shortly after new owners, Aurelius, took control of the business.

The brand's fall into administration has increased scrutiny on Aurelius, which secured a £207 million deal in November to buy The Body Shop from Brazilian cosmetics giant Natura & Co.

Aurelius is listed as the brand's top creditor and is understood to be first in line for a payout after putting the business into administration, despite previously pledging to "re-energise" the brand with a "strong turnaround strategy".

Read's comment on The Body Shop's woes hit just as it should be at its most relevant.

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