Recently, an Ontario judge has approved a sale process that could result in new ownership for The Body Shop Canada. During a virtual court hearing, Justice Peter Osborne granted the application from the struggling retailer to engage with potential buyers who could help keep the business operational.
According to the application, a sale was deemed the only viable option to sustain the business. This approval represents a critical juncture in the cosmetics retailer’s battle for survival, which began earlier this year. The company’s parent, a European private equity firm, had depleted its cash reserves and increased its debt, leading to the closure of 33 stores and the layoff of approximately 200 employees.
The parent company’s actions, including a separate creditor protection process, left The Body Shop Canada in a challenging position, struggling to source inventory and chart a path forward.
By April, Jordan Searle, head of the retailer’s Canadian operations, stated in an affidavit that there was a “sufficient level of interest” from potential buyers, making a sale a viable option. Although Searle did not disclose the interested parties, it was revealed in court that 12 potential buyers had shown interest, with some overlap between bidders from the U.K. and those considering a Canadian acquisition.
However, any deal would require the cooperation of the parent company, which oversees the chain’s licenses and has historically managed finances and inventory for its international operations, according to Natalie Renner, a lawyer for The Body Shop Canada.
