THE BODY SHOP DECLARES BANKRUPTCY AND SHUTS DOWN US STORES AGAINST ECONOMIC CHALLENGES - VORAKA

ORIGINALLY PUBLISHED IN VORAKA

Article Published on 12 March 2024 by Gloria Poletti | www.vorakamag.com

The Body Shop, a renowned UK-based cosmetics company founded in 1976 by human rights activist Anita Roddick, has officially filed for bankruptcy, leading to the closure of all its operations in the United States. The company has also announced the impending shutdown of several Canadian stores, with 33 out of 105 locations initiating immediate liquidation sales.

The decision comes after The Body Shop declared its US subsidiary non-operational starting March 1, following a series of ownership changes and financial struggles in recent years. Despite its dedication to natural, sustainable, ethical, and cruelty-free products, the company faced challenges exacerbated by high inflation, particularly affecting traditional retailers situated in malls and targeting the middle class.

With a legacy rooted in a commitment to environmental and social causes, The Body Shop gained prominence for being one of the first companies to prohibit animal testing. However, its journey has been marked by shifts in ownership, with L'Oreal acquiring it in 2006 for over a billion dollars, and later, Brazilian company Natura taking over in 2017 for another billion dollars.

In early 2023, Natura reported a significant decline in The Body Shop's sales, citing a 13.5% year-over-year decrease in 2022. The brand struggled as its direct-to-consumer channels, which had initially benefited from the COVID-19 pandemic, returned to pre-pandemic levels, further impacting overall sales

Towards the end of the previous year, The Body Shop was sold to asset management group Aurelius for approximately USD 266 million, as reported by CNN. Despite efforts to revive the brand, the economic challenges proved insurmountable, leading to the recent decision to file for bankruptcy and cease operations in the US.

As The Body Shop faces this unfortunate chapter in its history, the closure of its US-based stores signals the end of an era for a brand that once stood as a beacon for ethical and sustainable beauty products.