Why did The Body Shop suddenly go under just after its takeover? The receivers are investigating the circumstances of the bankruptcy as more questions arise.
Millions “lost”?
Barely three months after Aurelius took over The Body Shop, the chain filed for bankruptcy. The acquirer had allegedly choked on the chain’s true financial condition, having paid 207 million pounds in the process. The person responsible for the deal has since stepped down.
Part of the solution to the riddle may lie with the “millions of pounds” that are rumoured to have been taken out of the company just before the sale to Aurelius. The receivers are opening an investigation into those claims, while British MPs are calling for an even wider investigation into the chain’s failure, The Telegraph reports.
Losses abroad
According to the same newspaper, The Body Shop’s British branch was profitable before the bankruptcy: on a turnover of 163 million pounds (190 million euros), it reportedly made a profit of 19 million pounds. Its overseas operations, however, did make a total loss of 60 million (more than 70 million euros) in 2022.
The receivers want to close half the British shops and lay off 489 employees, in an attempt to make The Body Shop leaner and financially healthier. Those affected now appear to include managers of the chain, who are still owed three million pounds in bonuses.
