The Body Shop Bankruptcy Saga Nears End with Auréa Consortium AcquisitionThe Body Shop Bankruptcy Saga Nears End with Auréa Consortium Acquisition The protracted bankruptcy drama surrounding The Body Shop appears to have reached its conclusion, with Auréa Group leading a consortium that has signed up to acquire the company’s remaining assets. Exclusivity Agreement Reached On Wednesday, the joint administrators confirmed an exclusivity agreement with Auréa and its partners, headed by Charles Denton, former CEO of Molton Brown. The management team is optimistic that this deal will provide the best outcome for creditors and ensure The Body Shop’s long-term success. Due Diligence and Closing A period of due diligence will now take place, with the aim of completing the transaction in the coming weeks. Auréa Group, which specializes in beauty and well-being investments, believes in The Body Shop’s potential to capitalize on emerging consumer trends. Background and Process FRP Advisory, the handling administrators, initially planned a CVA (Company Voluntary Agreement) but later switched to a sale process. In June, owners submitted bids for The Body Shop International, which operates worldwide with 112 stores. International Complexity The Body Shop’s international presence presents complexities. Subsidiaries manage some stores, while others are franchised or have closed. Shortly before UK administration, Aurelius signed a deal to sell most of The Body Shop’s European and Asian businesses to an international family office. US and Canada Operations The US operations have been closed, while the Canadian business has undergone restructuring. The online business remains operational. Brand’s Decline and History The Body Shop, once a pioneer in eco-friendly beauty, has faced challenges since the founder’s death in 2007. Sold to L’Oréal in 2006, it has changed hands several times without finding a stable footing in the evolving beauty market. Future Outlook The Auréa Consortium’s acquisition marks a new chapter for The Body Shop. With a focus on beauty and well-being, the group aims to rejuvenate the brand and adapt it to meet the needs of modern consumers.
LONDON – The Body Shop bankruptcy drama appears to finally be over, with a consortium led by Auréa Group having signed up to buy the remains of the company.
On Wednesday, the joint administrators of The Body Shop International confirmed they have entered into an exclusivity agreement with Auréa and its partners, with the management team being led by Charles Denton, former CEO of Molton Brown.
“While the deal has not yet closed, we believe the combined experience of the consortium, together with the existing management team, represents the best outcome for creditors and will ultimately ensure the long-term success of The Body Shop,” said FRP Advisory, the administrators handling the sale.
FRP said a period of due diligence will need to take place, with the aim of completing the transaction “in the coming weeks”.
Auréa describes itself as an investment platform focused on beauty, well-being and longevity. The group said its strategy is to invest in brands “that have embraced new consumer trends.”
The team is led by Mike Jatania, former owner of the Lornamead personal care and cosmetics group, Paul Raphael and Andrew Vagenas.
As reported, FRP Advisory had originally planned a CVA (Company Voluntary Agreement) under which The Body Shop would emerge from debt and start trading again, paying creditors over a fixed period.
That plan didn’t work, so FRP switched to a sale process. In June, the owners submitted their bids for The Body Shop International, which has 112 stores and several subsidiaries worldwide.
A source familiar with the bankruptcy process said the overarching goal is “to get The Body Shop out of bankruptcy as quickly as possible and achieve the best outcome for creditors.”
Aurelius, the former owner and largest secured creditor, placed The Body Shop into administration in February, saying the company could not get its business back on track quickly enough given weak trading over the 2023 holiday season and the UK’s cost of living crisis.
The argument was similar to what Mike Ashley’s Frasers Group said when it placed Matches into administration less than three months after buying it late last year.
While both moves were legal under UK law, they left consumers and the wider retail community with questions. People were wondering why Aurelius and Frasers Group were buying their respective brands and what kind of due diligence they were conducting.
At The Body Shop, the international picture is complex. Some stores are run by subsidiaries, which are part of the UK sales. Others are franchises, some of which are still operating. Other stores have closed.
As reported, shortly before The Body Shop went into administration in the UK, Aurelius signed an agreement to sell most of The Body Shop’s businesses in Europe and parts of Asia to an international family office.
The portion of the affected business was equivalent to approximately 14 percent of The Body Shop’s global sales. At the time, the company operated approximately 2,800 outlets in more than 70 countries.
Meanwhile, the US operations have been closed, while the Canadian business has been restructured. The online business continues to operate.
The Body Shop, once a pioneer in clean, eco-friendly beauty, saw its fortunes slowly decline after the death of founder Anita Roddick in 2007.
She and her husband Gordon Roddick had already sold the then publicly traded company to L’Oréal in 2006. In recent years, The Body Shop has been passed from owner to owner, with no one knowing how to keep the business afloat and equip it to compete in the 21st century.
In 2017, when Natura & Co. bought The Body Shop from L’Oréal for a $1.1 billion valuation, it had good intentions. But it also had concerns about organization and profitability, and didn’t really do much with the once-revolutionary British brand.
Just five years later, in November 2023, Natura made a fateful decision by selling The Body Shop to Aurelius for an enterprise value of $254 million, about a quarter of the original purchase price.
