The Body Shop Canada files for bankruptcy and plans store closures
04 Mar 2024 --- The Body Shop Canada announces it will close approximately a third of its stores and cease online sales as it seeks creditor protection.
It commenced “restructuring proceedings” by filing a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act (NOI). According to reports, a court filing showed the company owes more than CAD$3.3 million (US$2.4 million) to unsecured creditors and about CAD$16,400 (US$12,102) to secured creditors.
The Canadian closures follow a series of performed and rumored shutdowns globally for The Body Shop in the UK, Belgium and Germany. Personal Care Insights has been covering the developments that were announced after Natura &Co sold the company to Aurelius for £207 million (US$261 million) late last year. Aurelius paid far less than the £880 million (US$1.1 billion) that Natura &Co gave L’Oréal for the retailer in September 2017.
The Body Shop seeks “breathing room”
Following the commencement of administration proceedings in the UK by its parent company, The Body Shop Canada says it is commencing the NOI process to obtain a stay of proceedings to provide “breathing room.” At the same time, it says it is evaluating its strategic alternatives and may implement specific restructuring initiatives.
The Body Shop Canada will close 33 stores.The brand has 105 stores across Canada and the closures will occur in 33 locations in cities including Toronto, Ottawa, Edmonton, Calgary, Saskatoon and Saint John. The Canadian subsidiary of the global beauty brand did not reveal how many staff members would lose their jobs.
Shutdowns and job losses
The Body Shop previously reported it would close up to half of its 198 stores in the UK following its fall into administration. The brand declared it would cut the size of its head office, incurring hundreds of job losses.
The layoffs could result in UK taxpayers having to pay millions of pounds to subsidize salaries. According to The Telegraph, workers for the company were told they would have to make claims through the government-backed redundancy payments service for their payoffs.
Meantime, there are reports the UK high street giant Next is considering a rescue bid for the troubled company while The Body Shop stores in India continue to thrive as management emphasizes that the company’s newly appointed joint administrators from FRP Advisory are focusing on fostering partnerships in Asia, Europe and the Middle East.
By Sabine Waldeck
