The Body Shop is to cut 300 jobs at head office while nearly half of its 198 stores in the UK could close with the loss of hundreds more jobs as the business battles for survival.
Administrators told staff on Tuesday that seven stores would close immediately, with more set to follow, while numbers at its offices in London and Littlehampton in West Sussex were being cut by 40% to 400. It is not clear if jobs at the group’s warehouse, also in Littlehampton, will be affected.
The retailer, which employs more than 2,200 people in the UK, called in administrators last week, less than two months after being taken over by the restructuring specialist Aurelius.
The seven stores that will shut on Tuesday are: Surrey Quays (London), Oxford Street near Bond Street (London), Canary Wharf (London), Cheapside (London), Nuneaton (Warwickshire), Ashford Town Centre (Kent) and Bristol Queens Road.
The joint administrators Tony Wright, Geoff Rowley and Alastair Massey from FRP said: “After years of unprofitability and following a full evaluation of The Body Shop’s UK business, the joint administrators have concluded that the current store portfolio mix is no longer viable. As an immediate step, seven stores will close today, with additional closures to follow. It is expected that at the conclusion of the restructuring, more than half of The Body Shop’s 198 UK stores will remain open.
“A reduced store footprint will coincide with a renewed focus on the brand’s products, online sales channels and wholesale strategies, bringing the brand in line with industry peers and supporting a return to financial stability.”
In total, 1,600 people work in the retailer’s stores, so almost 800 jobs could go if the group closes half the estate.
The administrators said the head office job cuts were part of creating “a forward-looking strategy and more nimble, financially viable model” and that swift action would “help re-energise The Body Shop’s iconic brand”. They added that relationships with key franchise and wholesale partners in Asia, the Middle East and Europe would be “a cornerstone of future success”.
Staff said they would have to apply to the government-backed Redundancy Payments Service for their payoffs, with some having served decades at the ethical business.
Aurelius is understood to be the main creditor, with a secured debt that will ensure it gets paid by administrators before most other creditors. It is expected to take back the chain, but only after many shops have closed and jobs been cut.
The Body Shop was bought by Aurelius for an initial payment of £117m in a deal agreed in November and finalised in early January.
The future of the group’s Irish, mainland European and Japanese divisions also hangs in the balance after being sold to a group called Alma24, whose main director has close links to Aurelius. The German arm of The Body Shop, which has about 60 stores, was put into insolvency last week and workers in Belgium, where there are about 16 stores, have been told it is also heading for insolvency.