Next weighs transfer for stricken cosmetics chain The Body Shop

Next has approached directors to The Body Shop a couple of potential deal to buy components of the stricken cosmetics chain.

Sky News has learnt that executives from the UK style retailing large have contacted FRP Advisory to specific an curiosity in buying property as a part of any sale course of it decides to launch.

There have been doubts this weekend, nonetheless, that FRP, which was appointed to deal with the insolvency of The Body Shop within the UK earlier this month, would elect to run a standard public sale, with one supply suggesting that contact between FRP and Next had already stalled.

Read extra: The Body Shop UK in administration – what went improper?

Next is known to have been monitoring The Body Shop for a while, however individuals near the FTSE-100 firm confirmed that it had expressed an curiosity in assembling a deal.

The retailer, run by Lord Wolfson, has grow to be probably the most prolific patrons of distressed retail companies in Britain lately.

Among the manufacturers it has acquired are Fat Face, Joules and the web furnishings retailer, Made.com.

It has additionally snapped up Cath Kidston and JoJo Maman Bebe, the maternity put on retailer, whereas it has struck partnerships with Victoria’s Secret and Gap.

One impediment to any take care of The Body Shop could lie in the truth that its model and mental property (IP) property will not be a part of the administration course of.

It is known that Aurelius, which has solely owned The Body Shop since 1 January, is financing the remainder of the enterprise, and as a part of that has secured main property together with inventory and IP.

FRP is anticipated to determine whether or not to launch an public sale inside weeks, with a sale of the restructured enterprise in its new type again to Aurelius a risk.

If Next did pursue a purchase order of the chain, it might be unlikely to retain many, if any, of The Body Shop’s British shops.

This week, FRP introduced the closure of practically half of its 198 UK shops, with seven shutting instantly.

“Following the earlier sale of loss-making businesses in much of mainland Europe and parts of Asia, and to support a simplified business, The Body Shop will also restructure roles in its head office,” the directors stated on Tuesday.

Hundreds of jobs will probably be misplaced from the shop closures and a downsizing of its head workplace that can go away roughly 400 individuals employed there.

“This swift action will help re-energise The Body Shop’s iconic brand and provide it with the best platform to achieve its ambition to be a modern, dynamic beauty brand that is able to return to profitability and compete for the long term,” FRP added.

Sky News’ revelation that Aurelius was getting ready to nominate directors sparked a vigorous debate about why the model based by the late Dame Anita Roddick and her husband Gordon practically 50 years in the past had faltered.

‘Mismanaged for years’

Aurelius purchased the enterprise from Natura, a Brazilian firm, late final yr and quickly found that it had inadequate working capital and that it was buying and selling much more poorly than anticipated.

One retail govt prompt there have been critical questions for Natura to reply, saying: “This company did not fail in the last six weeks, it has been underinvested in and mismanaged for years.”

The Body Shop’s companies throughout most of Europe and components of Asia have already been offloaded to a household workplace following the corporate’s acquisition by Aurelius in a deal it stated was valued at £207m.

At the time of the deal, The Body Shop employed about 10,000 individuals, and operated roughly 3,000 shops in 70 international locations.

Although it has struggled for worthwhile development for years, it has retained a outstanding presence on British excessive streets.

The Roddicks have been outstanding champions of environmental causes, a positioning which helped it achieve an edge over rival retailers through the Eighties and ’90s.

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Its opposition to the animal testing of cosmetics was additionally uncommon within the many years instantly after it was based.

Its distinctiveness has, nonetheless, been diminished lately by the emergence of rivals which have additionally put sustainability on the coronary heart of their companies whereas extra successfully focusing on youthful customers.

Dame Anita died in 2007.

Natura was reported to have paid greater than $1bn to purchase The Body Shop in 2017.

It was owned by L’Oreal, the cosmetics large, previous to its sale to Natura.

Next, FRP and Aurelius declined to remark.