The Body Shop is going to be sold again!
Following the suspension and bankruptcy of its operations in the UK, Germany, and the United States, The Body Shop is now facing bankruptcy and acquisition of its French business. It is worth mentioning that in the relevant acquisition proposal, a company has offered 3 euros with the intention of taking over the brand and its 28 stores in France.
From being acquired by Natura&Co for 1 billion euros to now being on the verge of being sold at a low price, The Body Shop, as the world’s first global brand to develop through the model of a single-brand cosmetics specialty store, how did it manage to ruin its own strong position?
28 stores sold for 3 euros?
According to public reports, on March 19th of this year, The Body Shop France filed for bankruptcy in France and was subsequently taken over by the Paris Commercial Court on April 4th. At that time, The Body Shop France had 51 stores in France, including 13 in the Paris region and 38 in other areas, as well as 6 franchise stores.
This news has attracted widespread attention in the market. So far, two buyers have submitted partial acquisition offers to the Paris Registry.
One of the buyers, Horizon Pharma, is a professional company with extensive experience in the distribution of pharmaceuticals and healthcare products. In 2020, it successfully took over the sales network of Parashop (a well-known pharmacy store in France) from the Marseille Court in France.
In the acquisition proposal for The Body Shop France, Horizon Pharma has offered to take over 28 stores and 105 out of 238 job positions for a price of 24 euros. Furthermore, the company has expressed its intention to take over the inventory in the stores and plans to open new stores within the Parashop stores, further expanding its business.
The other potential buyer, Berger International, the holding company of the Emosia Group, owns two major brands, My Jolie Candle and Maison Berger Paris, specializing in home fragrances. It is worth mentioning that Berger International has already become a supplier and creditor of The Body Shop through its subsidiary Bougies La Française, thus having a deep understanding of its operations in France.
In the related acquisition proposal, Berger International has offered to acquire 17 stores and 21 job positions of The Body Shop France for 1.57 million euros. Berger International has a clear plan for the future of The Body Shop France, intending to transform some stores into a new multi-brand format, including My Jolie Candle and Maison Berger Paris, offering consumers a more diverse selection.
Currently, the negotiation of the acquisition proposals is still ongoing. However, according to relevant regulations, since The Body Shop France filed for bankruptcy on March 19th of this year, it is allowed a 6-month observation period to implement a recovery plan. In other words, whether The Body Shop France will ultimately go bankrupt or be acquired will be determined by September 19th at the latest.
From “Pioneer of Single-Brand Stores” to “Hot Potato”
Public records show that The Body Shop was founded by Anita Roddick in Brighton, UK, in 1976. The brand’s core philosophy revolves around ethical consumption, environmental consciousness, and sustainability. Its product range includes body care, hair care, skincare, perfumes, and makeup, all based on natural ingredients. The Body Shop emphasizes its commitment to animal cruelty-free practices and support for fair trade. In January 2024, the brand went a step further and announced that all its product formulations had been certified by the Vegan Society, making it the first beauty brand with a fully vegan lineup.
However, since its acquisition by L’Oréal Group for 7.4 billion yuan in 2006, The Body Shop has experienced a significant decline in performance. In 2017, L’Oréal Group sold The Body Shop to Natura&Co for 7.9 billion yuan.
Despite Natura&Co’s accumulated operational experience from managing other brands, it failed to effectively improve The Body Shop’s performance. According to Natura&Co’s third-quarter financial report for 2023, released before selling The Body Shop, the brand’s sales had declined by 15% and its net income was only 829.4 million Brazilian reals, indicating a continued poor performance. This situation raised concerns about The Body Shop’s future development in the market.
On November 14, 2023, Natura&Co decided to sell The Body Shop to the German private equity firm Aurelius Group for 1.9 billion yuan, marking a significant decrease in value compared to its previous purchase, with a loss of approximately 7 billion yuan.
Following the acquisition by Aurelius Group, the market became filled with concerns about The Body Shop’s future direction. Within just three months, there were frequent reports of restructuring, bankruptcy, divestment, or further sales of The Body Shop on a global scale.
Looking back at The Body Shop’s journey, it is undoubtedly a cause for lament.
As the pioneer of single-brand cosmetics stores, The Body Shop reached its zenith with 4,000 stores and sales channels (including company-owned and franchise stores) spread across over 70 cities/regions in five continents. Whether it is the bankruptcy, suspension of operations, or the recent offer of 24 euros by a French company to acquire dozens of brand stores, all these events reflect the market and capital’s uncertainty regarding the brand’s future prospects.
Can The Body Shop rise again?
So, is there a possibility for The Body Shop to rewrite its ending?
When Aurelius first announced the bankruptcy of The Body Shop’s UK operations, the brand may potentially invest its resources into online business.
CHAILEEDO has also discovered that while facing challenges in the UK and European markets, The Body Shop’s business in certain regions of Asia, such as Singapore, Malaysia, Taiwan, Hong Kong, and Macau, is reportedly unaffected for the time being.
As of the time of writing, The Body Shop’s Tmall Global flagship store, operating through cross-border e-commerce channels in mainland China, is still running normally and actively participating in the platform’s 618 shopping festival.
However, a beauty industry professional with over 20 years of experience pointed out that as a brand that rose with the trend of clean beauty, The Body Shop missed the opportunity in the Chinese market due to its stance against animal testing and political issues.
Meanwhile, overseas, the concepts of clean beauty and natural products have been prevalent for many years, and The Body Shop also faces issues such as product aging and declining appeal. Zou Bin, a brand consultant from Switzerland’s Riesmei and an advisor to the Hong Kong International Business Development Council, bluntly stated that The Body Shop’s differentiating advantage in concept is no longer significant, and its brand influence has become outdated. The consumers who were once attracted to the brand have also aged.
The challenges faced by The Body Shop reflect those faced by many traditional brands. With changing consumer demands and intensified market competition, brands that refuse to adapt and evolve with the times will eventually face the risk of marginalization.
In conclusion, the development of a brand is always an ongoing process of adaptation and innovation. Only by keeping up with the pace of the times and continuously adjusting and improving itself can a brand stand undefeated in the fierce market competition. For The Body Shop, the opportunity to rewrite its ending still exists.
