The Body Shop administration: what does news mean for UK business, is shop near me closing - who owns it?

The Body Shop has appointed administrators, putting the employment of thousands within the cosmetics chain at risk.

The company, managing over 200 stores throughout the UK, submitted a notice to appoint administrators on Monday (12 February), and sources suggest that the business may enter administration by Tuesday.

Insolvency experts FRP Advisory are taking charge of the proceedings, and said administrators 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 retailer was founded in 1976 by Anita Roddick and her husband Gordon as one of the first companies to promote so-called ethical consumerism, focusing on ethically produced cosmetics and skincare products.

But what does administration mean for the future of The Body Shop? Will your local branch be closed, and how will jobs be affected? Here is everything you need to know.

What does administration mean for The Body Shop?

Administration refers to a legal process that occurs when a company is facing financial difficulties and is unable to meet its financial obligations. The goal of administration is to help the business recover and avoid bankruptcy.

During administration, a licensed insolvency practitioner, known as an administrator, is appointed to take control of the company's affairs and make decisions aimed at preserving its viability.

Efforts are made to reduce costs, streamline operations and improve the company's financial position. This may involve renegotiating contracts, cutting expenses or making staff redundancies.

The Body Shop's administration comes only weeks after new owners, European private equity firm Aurelius, took control of the business.

Aurelius, which specialises in buying and turning around troubled firms, secured a £207 million deal in November to buy The Body Shop from Brazilian cosmetics giant Natura & Co. It only took control of operations officially on 1 January.

The administrators are expected to seek buyers for the business and its assets, but the process will nonetheless cast a shadow over the future of its stores and workforce.

FRP Advisory said the move to place the retailer in administration “provides the stability, flexibility and security to find the best means of securing the future” of the chain.

Will my local Body Shop close?

The chain will continue to trade through stores and online during the administration process. Administrators stressed that the process will only affect its UK business, with international franchises not impacted.

According to the BBC: "It is highly unlikely that The Body Shop name will completely disappear from Britain's High Streets after nearly 50 years."

What does it mean for jobs?

The administrators are anticipated to make significant cost reductions, particularly in areas such as property and rent, which may result in job layoffs.

FRP said: “The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand, relevant to customers and able to compete for the long term. Creating a more nimble and financially stable UK business is an important step in achieving this.”

It added: “The joint administrators will now consider all options to find a way forward for the business and will update creditors and employees in due course.”