After The Body Shop International Limited filed for bankruptcy in the UK, its subsidiary in america and Canada is doing the identical.
The Body Shop’s insolvency filing within the U.K. got here “with no advance notice to, or pre-filing discussion with, the corporate and/or the corporate’s management,” in response to the Chapter 7 bankruptcy filing on March 8.
Why did The Body Shop file for bankruptcy?
European private equity company Aurelius acquired The Body Shop International from Brazil’s Natura &Co for greater than $250 million in November 2023. The corporate had about 250 stores within the U.K. and three,000 globally. Three months later, The Body Shop’s U.K. business’ owners had put it in administration — a comparable status to filing for bankruptcy within the U.S.
The Body Shop was in a “much worse financial position” than expected, in response to a Yahoo Finance report in February.
“In line with The Body Shop’s latest financial accounts, its lease liabilities stood at £57m at the tip of 2022,” The Telegraph reported in February 2024.
The corporate “maintained a centralized money management system” during which the corporate’s “money was swept each day to a concentrated account” after which “re-advanced” as needed to fund the corporate’s obligations, in response to the Chapter 7 filing. The parent company then swept the U.S. subsidiary’s money shortly before filing for insolvency within the U.K. in February.
When did The Body Shop exit of business?
The Body Shop International has told its U.S. subsidiary that it should not provide it with any funding to proceed operations as usual “or to conduct an orderly winddown, and the corporate is otherwise without sufficient liquidity to proceed operations past March 1, 2024.”
The Body Shop’s U.S. business has stopped selling at its 50 outlet locations. In Canada, it closed 33 of its 105 stores.
A press release from April 2023, when Natura &Co still owned The Body Shop, described the brand as “a really omnichannel business with greater than 2,500 retail locations (owned and franchised) in greater than 80 countries; The Body Shop at Home direct to consumer channel within the UK and Australia; and an e-commerce presence in nearly 60 markets.”
Natura &Co acquired The Body Shop from L’Oreal in 2017 for about $1 billion.
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