Job losses likely as The Body Shop lines up administrators

Last year, the Irish arm of the cosmetic chain reported a pre-tax loss of €1.6m which it said was primarily driven by the impairment loss on intangible assets of €1.56m.

The Body Shop, the skincare and cosmetics retailer founded by the campaigner Anita Roddick in the 1970s, is set to appoint administrators in a move likely to result in lost jobs and shop closures.

The pan-European private equity investor Aurelius bought the company six weeks before Christmas but said trading over the festive period and early January had been weak.

The retail chain, which has more than 200 shops, also did not have enough working capital to continue trading in its current form.

Employing around 50 staff members, The Body Shop has seven stores in Ireland, five of which have leases signed by The Body Shop International Ltd, according to most recent account filings, with the remaining two part of franchise agreements.

Last year, the Irish arm of the cosmetic chain reported a pre-tax loss of €1.6m which it said was primarily driven by the impairment loss on intangible assets of €1.56m.

It is not known if the stores in Ireland will be impacted.

The Irish Examiner reported last month that workers here had received communication informing them of changes to the company as it transitioned to new ownership.

Administrators at FRP Advisory are likely to be appointed as soon as this week to handle an insolvency process, Sky News reported, citing sources who said they expected the closure of a significant number of the stores. The Body Shop’s international businesses have already been sold to an unknown family office, according to Retail Week.

Roddick, an environmental campaigner, activist and entrepreneur, founded the Body Shop in Brighton in 1976. The company remained under her ownership for three decades, until she sold it in 2006. Roddick died the following year.

By then, The Body Shop had become synonymous with its ethical positions, including a refusal to stock products tested on animals and a sourcing of ingredients from natural products that are traded ethically.

Roddick’s decision to sell the business to the French corporation L’Oréal for £652m attracted criticism from those who saw it as a departure from the company’s values.

Additional reporting The Guardian