Landlords brace for wave of closures as The Body Shop goes into administration

The Body Shop is struggling due to declining sales and increased competition. Photo: DANIEL LEELE/AFP via Getty Images

Landlords are bracing for a wave of closures after The Body Shop went into administration, putting more than 2,000 jobs at risk.

The UK arm of the ethical cosmetics chain covering about 200 stores, was taken over by its owners on Tuesday. , private equity house Aurelius, weeks after it was acquired in a £207 million deal from previous owners Natura & Co.

Administrators at FRP Advisory will now consider all options to find a way forward for the UK business and will update creditors and employees in due course.

This raises the possibility of a hit to network owners, who include numerous independent landlords, local authorities and large property groups.

Land Securities Group, which owns the Westgate shopping center in Oxford, is one of the Body Shop's largest landlords. Others include Network Rail and Nuveen Real Estate, one of the world's largest investment managers.

The Body Shop has stores in London's Liverpool St and London Bridge stations, which are operated by Network Rail, as well as stores in shopping centers Landsec, including the White Rose Center in Leeds and Bluewater in Kent.

The Body Shop's latest financial statements show its lease liabilities stood at £57 million at the end of 2022.

Alan Spencer, head of UK retail at Savills, said: “Recording rents have generally fallen over the past year. between five and 10 years, and in many locations The Body Shop has already been occupied for some time, it is likely that, as we have seen in previous administrations, many landlords will have to endure some hardship in this process.

“However However, post-Covid demand tends to be high, so in some areas, especially market towns, it may even present an opportunity for landlords.”

A Landsec spokesman said: «The Body Shop currently generates less than 0.5% of total rent and we will work with administrators to find the best solution for everyone.»

The retailer's UK stores will remain open , while administrators try to restructure the business and sales will continue online. This process will not affect The Body Shop's global franchise partners.

Environmental activist Dame Anita Roddick founded The Body Shop in 1976. : Larry Ellis/Halton Archive

In a statement, administrators said: “The Body Shop has faced a long period of financial problems under its previous owners, which has coincided with a challenging trading environment for the wider retail sector.”

«With rapid action taken last month, including the closure of The Body Shop At Home and the sale of its business across much of Europe and parts of Asia, focusing on the UK business is the next important step in The Body Shop's restructuring.»

Aurelius has sold many of the Body Shop's European and Asian operations to an unnamed investor, Sky News reported on Saturday.

Founded in Brighton in 1976 by environmental activist Dame Anita Roddick, The Body Shop has widely recognized for introducing ethical (or «cruelty-free») beauty products to a wider audience.

Its stores can now be found in approximately 70 countries, employing up to 10,000 employees and 3,000 employees. stores worldwide.

However, the retailer was struggling with falling sales and increased competition from new high street rivals such as Lush and Rituals in the UK.

Prior to the sale of Aurelius, the company tried revitalize its image by relaunching some stores as «Change Workshops» that focus on the activism the brand was once known for.