The Body Shop files for bankruptcy, shuts all US stores
Retailer will soon close dozens of Canadian stores after filing for bankruptcy: CNN
The UK-based cosmetics company, The Body Shop, shut down all of its US-based operations and will soon be closing dozens of Canadian store locations after filing for bankruptcy, CNN reported.
Earlier this month, The Body Shop, in an official release, announced that its US subsidiary was no longer operational, effective March 1.
It further added that 33 of its 105 stores in Canada will begin liquidation sales immediately and “online sales via Canada’s e-commerce store will stop,” but that all Canadian locations will remain open for the time being, reported CNN.
According to reports, high inflation in recent years has affected traditional retailers, particularly those like The Body Shop, which predominantly operated out of malls and were aimed at the middle class.
The UK-based cosmetics company, founded in 1976 by human rights activist and environmental campaigner Anita Roddick, is known for products it markets as natural, sustainable, ethical and cruelty-free.
It was one of the first companies to prohibit testing on animals for many of its products, according to CNN.
Later in 2019, it was certified as a “B Corp,” a designation given to companies that meet certain transparency and environmental conscientiousness standards.
By 2023, it had expanded to more than 2,500 retail locations in over 80 countries and was available to purchase online in more than 60 markets.
Since its inception, The Body Shop has changed hands several times. It was purchased by cosmetics giant L’Oreal in 2006 for more than a billion dollars and later sold to Brazilian company Natura in 2017 for another billion dollars, reported CNN.
However, the brand fell into hard times and has been ailing in recent years.
In an early 2023 report, Natura noted that The Body Shop was “(facing) headwinds,” with a year-over-year decline of 13.5 per cent in 2022, a year the company said “was far from easy” for the brand. Its direct-to-consumer channels, which had “benefitted during COVID-19,” returned to “more normalized pre-pandemic levels,” further impacting sales numbers, Natura said.
Moreover, late last year, The Body Shop was sold to asset management group Aurelius for about $266 million, as reported by CNN.