Body Shop has reportedly begun filing for administration, kicking off a process that is expected to be characterised by widespread job cuts and store closures.
The Guardian reported on Monday evening that Body Shop had filed its intention to bring advisors in, after weekend rumours of the cosmetics firm’s impending fall into administration.
This follows tough Christmas trading for the retailer, which was founded in 1976 and currently operates some 200 stores.
Private equity firm Aurelius bought Body Shop just six weeks ago, becoming the chain’s third owner since founder Anita Roddick sold in 2006 to L’Oreal for £652 million.
A lack of working capital had become apparent following the worse-than-expected Christmas period, with recent competition from the likes of Lush also having hit trading.
“Whatever the outcome, it looks likely that many shops will shut for good, opening up fresh holes in high streets across the UK,” Hargreaves Lansdown analyst Susannah Streeter said on Monday.
“Administration will mean the company is protected from compulsory liquidation and offers legal protection from creditors’ demands.
“It will give Aurelius breathing space to restructure and close highly underperforming stores and refocus attention on e-commerce sales.”