UK taxpayers could pay millions to support staff removed by The Body Shop

23 Feb 2024 --- Taxpayers may pay millions of pounds to staff laid off by The Body Shop following its fall into administration in the UK.

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.

The Body Shop recently announced it would close up to half of its 198 stores in the UK and reduce the size of its head office, incurring hundreds of job losses.

People who worked for the company for two years or more would qualify for redundancy pay, which is capped at approximately £643 (US$816) a week before tax. Higher earners at the business, such as those in head office, are not eligible for the payments.

Restructuring and removing
The beauty retailer employs approximately 2,200 people in the UK, including 750 staff at its head office. The ethical beauty brand decided to remove 40% of head office roles, retaining about 400 full-time staff.

Taxpayers in the UK could fund The Body Shop layoffs.The Body Shop informed staff about the restructuring in a video call last Tuesday. Administrators at FRP, the advisory company overseeing the brand, said the retailer’s presence on the high street was no longer possible.

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

The cosmetics brands’ stores on London’s Oxford Street and Canary Wharf, Ashford Town Centre in Kent and Queens Road in Bristol are among the seven that closed earlier this week.

Falling to administration
Natura &Co recently sold The Body Shop to the international private equity group Aurelius for £207 million (US$261 million). The value falls short of the £880 million (US$1.1 billion) that Natura &Co paid L’Oréal to buy the retailer in September 2017.

Under Aurelius, The Body Shop collapsed into administration in the UK last week and has faced closures, layoffs and ingredient excess.

The Body Shop’s fair trade suppliers, from regions including the Amazon and Africa, claim they have over US$1 million worth of beauty ingredients that may never be ordered or paid for following the closures.

By Sabine Waldeck