The Body Shop｜The Body Shop, a skin care brand that promotes environmental friendliness and opposes animal testing, announced yesterday (13/2) that the British company has appointed a bankruptcy administrator and entered into receivership procedures. It is expected that many local branches will be forced to close, but global Franchised stores will not be affected. In fact, The Body Shop in the UK has been in financial trouble for many years. It has been acquired by three different groups, but it still failed to change its destiny. Where should the brand go next?
The Body Shop in the UK has entered administration and many branches may close (Getty)
The Body Shop in the UK enters administration and many branches may close
The Body Shop was founded by Dame Anita Roddick in 1976. It focuses on vegan skin care and opposes animal testing. It has been deeply loved by different consumers and is also the memory of many people born in the 80s and 90s in Hong Kong! A few days ago, FRP, a business consulting company appointed as the administrator of The Body Shop in the UK, publicly stated: “All options will now be considered to find a way forward for the company.” During the takeover period, it will continue to operate, both online and in part. Physical stores are operating, but more than 200 branches in the UK may close their operations, and hundreds of employees will face unemployment. However, it is expected that global franchise stores will not be affected.
A statement from business consultancy FRP also said: “This approach has been taken to provide stability, flexibility and security to ensure the best way to future-proof The Body Shop and revitalize this iconic British brand.” (Taking this approach provides the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalising this iconic British brand)”
At its peak, The Body Shop had branches in more than 70 countries (Getty)
At its peak, The Body Shop had branches in more than 70 countries
The Body Shop mainly sells vegan soaps, skin care products and cosmetics, etc. It is one of the founder companies that promotes ethical consumerism and emphasizes fair trade. The Body Shop was once loved by consumers of all ages. It was listed on the London Stock Exchange in the 1980s. The brand has set up branches in many countries around the world, many of which are operated through franchises, making the brand extremely popular. Seizing the market quickly, it had branches in more than 70 countries and regions at its peak.
The Body Shop was acquired by L’Oréal Group for HK$6.3 billion (IG@thebodyshop)
The Body Shop was acquired by L’Oréal Group for HKD 6.3 billion
The Body Shop was once the first choice for skin care for many girls born in the 80s and 90s. Whether it is acne-removing tea tree oil, soap, white musk perfume and other effective and easy-to-use skin care and cosmetics, coupled with the affordable price, it is still the first choice today. Items that I keep repurchasing. Unfortunately, as the market and consumption habits changed, the brand was acquired by L’Oréal Group, one of the French beauty giants, in 2006. At that time, the transaction was completed for 652 million pounds (about 6.3 billion Hong Kong dollars).
In February 2017, L’Oréal Group decided to sell The Body Shop (IG@thebodyshop)
Unfortunately, in February 2017, L’Oréal Group decided to sell The Body Shop. Jean-Paul Agon, chairman and CEO of L’Oréal Group at the time, explained the decision by saying that there had been no successful integration between THE BODY SHOP and the group since the acquisition. In order to avoid conflicts of interest with other brands, an attempt was made to allow THE BODY SHOP to operate independently. It was classified as a selected department of the group, hoping to reverse the brand’s declining profits, but unfortunately the performance did not improve.
Sold to Natura & Co for HKD 8.3 billion, then resold at 1/4 of the price (IG@thebodyshop)
Sold to Natura & Co for HKD 8.3 billion and then resold at 1/4 of the price
In the same year (2017), L’Oréal Group successfully resold The Body Shop to the Brazilian beauty brand Natura & Co. The transaction was completed for 1 billion euros (approximately HKD 8.3 billion). Unfortunately, it still failed to change the fate of the brand’s declining performance. , sales have declined for several consecutive quarters, including a 12% drop of approximately US$164 million at one time.
Natura &Co Group declared last year (2023) to “simplify and refocus its operations” and sold The Body Shop to the investment company Aurelius for 207 million pounds (approximately HK$2 billion) at the end of the year. However, this move actually did not go as expected. At that time, it was estimated that the successful transaction would be completed at 400-500 million pounds, not to mention that the brand was originally purchased for 1 billion euros (approximately HK$8.3 billion), which can be said to be a heavy loss.
Investment companies are also at a loss: The Body Shop has been taken over by a bankruptcy administration company (IG@thebodyshop)
Investment companies are also at a loss: The Body Shop has been taken over by a bankruptcy administration company
Aurelius is a German investment company whose main business is to acquire companies with growth potential and has rich experience in long-term investment and management. At that time, Aurelius said that although the retail market was full of challenges, he was confident that he could inject new vitality into the brand. Unfortunately, shortly after The Body Shop became part of the company, it announced that it had appointed a bankruptcy administrator and entered into receivership procedures to find a new way out for the brand.
Why did THE BODY SHOP decline? (IG@thebodyshop)
Why did THE BODY SHOP decline?
THE BODY SHOP was once a hit, with more than 3,000 stores around the world at its peak. Its brand opposed animal testing, promoted ethical consumerism and promoted environmentally friendly business concepts, and was even more highly regarded. But why does it seem to have suddenly declined? In fact, it was Xiao He, the brand who first proposed concepts such as naturalism and vegan skin care. Later, many brands launched similar products one after another, but over time they lost their uniqueness in the market. The brand failed to grasp the rapid changes in the market, resulting in a decline in brand profits and financial difficulties.
THE BODY SHOP adheres to the core concept of the brand: giving up entering countries that require animal testing (IG@thebodyshop)
Adhere to the core concept of the brand: give up entering countries that require animal testing
Secondly, THE BODY SHOP has always adhered to the concept of opposing animal testing, so many countries that require animal testing cannot develop business. For example, THE BODY SHOP once entered the counters of Chinese airports. However, China clearly stipulates that imported cosmetics must be tested on animals. However, the brand was unwilling to comply with this policy and the policy was removed from the counters in March 2014. As a result, the brand has not been able to enter many stores. Countries with similar regulations.
However, it is precisely because THE BODY SHOP adheres to the core concept of the brand that it has accumulated many loyal consumers and its excellent reputation allows it to still occupy a place in the market. I believe that brands with excellent backgrounds and concepts will not be tarnished and will one day continue to be brilliant.
