The Body Shop has been rescued from bankruptcy by a consortium led by British cosmetics tycoon Mike Jatania, with the ethical beauty brand's remaining 113 UK stores set to remain open.
Aurea, a growth capital firm founded by Jatania and Paul Raphael, a former executive at UBS, Credit Suisse and Merrill Lynch, said it had acquired all of The Body Shop International's assets, including its UK stores and a controlling stake in its Australian and North American locations, for an undisclosed amount.
The new owners, who finalised the deal late on Friday, are not expected to plan to close any of the UK's current stores, which employ more than 1,300 people.
An Aurea spokesman said: “We see our stores as a key part of the brand's connection with its customers and will naturally continue to monitor our store footprint to ensure we are optimising performance through that connection.”
Founded by Anita Roddick in 1976, The Body Shop entered into insolvency proceedings in February after owner Aurelius, which bought the company three months earlier for £207 million, said it could not turn the business around. The company owed more than £276 million to creditors at the time.
Administrators from FRP Advisory have since closed 85 stores, leaving 113, cutting around 500 jobs in the stores and at least 270 administrative staff. Stores in most of Europe and the United States have also been closed due to a disruption in product supplies from the British parent group. Most of the franchised stores in Asia remain open.
Aurea said the acquisition of The Body Shop was the company's largest deal to date and aimed to “led the revival of The Body Shop and restore global leadership in the ethical beauty category that it pioneered.”
Jatania will become chairman, while Charles Denton, former CEO of cosmetics brand Molton Brown, will serve as chief executive.
The group is believed to be in talks with a number of providers to secure working capital for the business, with restructuring specialists Hilco set to provide a £30m loan, Sky News reports.
“Aurea will use his investment acumen, deep industry knowledge and operational expertise to restructure the business while respecting the traditions and values that connect our brands to our customers,” the group said in a statement.
The group already owns brands such as plant-based cosmetics company Herbivore Botanicals, natural hair care products company Scandinavian Biolabs and Decipher, which makes and sells foundation makeup.
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Jatania previously ran Lornamede, which owns personal care brands including Lipsil, Woods of Windsor, Yardley and Harmony Haircare, which he sold to rival Li & Fung for around £155 million more than a decade ago.
Jatania said: “With our acquisition of The Body Shop, we have gained a truly iconic brand with highly engaged consumers in over 70 markets around the world. We are committed to exceeding customer expectations by investing in product innovation and seamless experiences across all channels where they shop, whilst respecting the brand's ethical and activist stance.”
Denton said: “I am incredibly pleased to be leading this brand that I have admired for many years. I recognise that revitalising the business requires bold action and a consumer-centric, commercially agile mindset. We believe we have a sustainable future and, working closely with management, I aim to restore The Body Shop's unique, values-driven and independent spirit.”
Steve Baruch, director at FRP, said: “We are pleased to hand over The Body Shop to experienced new owners who have a long and successful track record of turning around retail businesses. They recognise the enormous value of their famous brand and have a clear vision for its future.”
