Great Britain: Cosmetics company The Body Shop faces bankruptcy – Economy

Great Britain: Cosmetics company The Body Shop faces bankruptcy – Economy

As the investment company Aurelius, based in the tax haven Grünwald near Munich, bought the world-famous cosmetics company The Body Shop just three months ago, there was great joy. “We are thrilled to be taking over this iconic British brand,” said Tristan Nagler, partner at Aurelius. According to Nagler, the goal is to give the company new impetus in order to write the next chapter of success. However, it looks like the next chapter is not going to be a good one: Aurelius is planning to appoint an insolvency administrator for The Body Shop’s British business this week, according to people familiar with the matter.

No wonder the cosmetics company’s employees are alarmed. Suddenly there are many questions. Which of the 200 branches in Great Britain are on the verge of extinction? How many employees lose their jobs? And what does the bankruptcy mean for all the other Body Shop stores around the world? Anyone looking for answers from Aurelius officially only got one thing on Monday: no comment.

Aurelius is a globally active and listed investment company that sells itself as a “reliable partner for medium-sized companies and large corporations”. At least that’s what it says on the financial investor’s website. Aurelius is also known for its aggressive approach to reorganizing troubled companies from various industries. A few years ago they took over Private equity company the North Rhine-Westphalian construction supplier Reuss-Seifert and then relocated production to Poland. Well-known investments from earlier years include the car radio manufacturer Blaupunkt, which Aurelius bought from Bosch, and the Shipping company Peter Deilmann with the MS Deutschland. Both went bankrupt after Aurelius sold the majority.

Sustainable cosmetics are now available at all drugstore chains

So the question is: What happens now to The Body Shop? The company’s history goes back to 1976. At that time, Anita Roddick opened a shop called “The Body Shop” in Brighton on the south coast of England. There she sold glass bottles that could be refilled again and again with cosmetic products that were made from natural materials and without any animal testing. In the late 1970s this was nothing less than a sensation, because back then the cosmetics industry didn’t care much about anything like animal welfare.

The Body Shop has been a success story for decades. From the very beginning, the company sold what everyone actually wants today: sustainably and ethically manufactured products. In addition, Roddick was a founder who caused a stir around the world with her campaigns. For example, there was “Save the Whale”, a campaign to save whales that she started in the 1980s together with Greenpeace. At that time, Roddick fought to use jojoba oil as a replacement for sperm whale oil, which was then widely used in the cosmetics industry.

Looking back, it can be said: Roddick’s strategy, now deceased, worked. And her message was received: As a customer of The Body Shop, you don’t buy just any face cream, but one that can calm your own ecological conscience, if you have one. The thing is: For many people, it now works pretty well with dm or Rossmann.

What will happen next is uncertain. Aurelius bought The Body Shop in November for 207 million pounds (equivalent to 242 million euros). Until then, the company belonged to the Brazilian cosmetics company Natura, which in turn acquired The Body Shop from the French company L’Oréal in 2017 for around one billion euros. According to experts, the massive loss of value is mainly due to the fact that The Body Shop has long since lost its unique selling point as a cosmetics company that produces products without animal testing.

The British company, headquartered in London, has around 7,000 employees and operates around 2,500 stores in 89 countries worldwide, most of them through a franchise model. The bankruptcy case only concerns The Body Shop in Great Britain. According to reports, parts of the business in Europe and Asia were sold a few days ago to Family Office, an asset management company whose name is not yet known.

The question remains: Why is the bankruptcy in Great Britain now of all times? People familiar with the matter say The Body Shop’s financial situation is worse than expected when it was purchased. It is now about restructuring, they say, to make the company leaner and more digital. In plain language, this probably means that branches will be closed and online business will be expanded.

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