The Body Shop’s German arm falls into administration

The Body Shop’s mainland European businesses have begun shutting down, with the German stores put into administration and its Belgian staff told they will be next, placing more than 460 jobs at risk across the two countries.

The closures come after Aurelius, the German restructuring specialist that bought The Body Shop last year, put the ethical beauty chain’s main UK business into administration this week.

Most of the European operations were sold last month to a buyer whose identity was not initially disclosed by Aurelius. Staff were told the buyer was a “family office” – a term that typically refers to the management of personal wealth.

It is understood the buyer is Alma24, a company controlled by Friedrich Trautwein, an executive who has close links to Aurelius. Alma24 is also understood to have taken control of The Body Shop in Japan and Ireland.

Staff said they had been told that all 60-plus stores and the head office in Germany, where the business employs almost 400 people, were likely to close. An insolvency specialist, Dr Biner Bähr at the law firm White & Case, has been appointed to handle the German business.

Workers in Belgium, where the chain has about 16 stores and 50 employees, are also understood to have been told on Friday morning that administrators were to be appointed.

One source said: “The actions being taken may not be wrong but it is how it is being done that is breaking people’s hearts. People are being told with no notice: ‘You work for an unnamed family company,’ when some of these people have been with the company for years, some 30 years. It is so painful.”

Sources said The Body Shop’s operations in Ireland, Austria and Luxembourg, which together have about 20 stores and more than 100 staff, were also expected to be put into administration shortly. The Austrian and French websites were not operating on Friday.

The problems at The Body Shop’s international divisions mark the latest blow to the group, which has had three owners since it was sold by its founder, Anita Roddick, shortly before her death in 2006.

Roddick, who set up the business in Brighton in 1976 to help support her two daughters, campaigned against animal testing of cosmetics and promoted natural products sourced ethically in a way that would support vulnerable communities around the world.

She shocked fans of the brand by selling up to L’Oréal, the cosmetics giant that owns Maybelline and Garnier, for £652m. The brand was then sold on to the Brazilian natural cosmetics group Natura, which already owned Australia’s Aesop beauty brand, for €1bn in 2017. After Natura built up debts in buying the Avon home-selling cosmetics group, it quickly sold off Aesop and then The Body Shop.

Aurelius agreed to pay £207m for The Body Shop in November last year and took control in January. It only paid £117m upfront, with a further £90m “earn-out” that would only be paid if The Body Shop reached certain financial goals. With large parts of the business now sold off and expected to close, it is not clear if those goals will be reached.

It is understood that the status of a number of countries, including France, Spain and Sweden, is unclear as the directors in those countries have not signed documents finalising transfer of ownership.

The group’s operations in Canada and Australia, which have been successful, are expected to remain open.

One well-placed source said: “We don’t understand today who is the owner and who is responsible for people.”

Aurelius is the main creditor to the UK arm of The Body Shop and so is expected to buy back a downsized version of the business – with as few as 100 stores – from administrators.

Shortly after buying the business, Aurelius made loans to the group that were secured against intellectual property assets and shares in its Canadian arm, as first reported by the Financial Times. This arrangement effectively gives the group control over key assets, making rival bids unlikely.

Alma24 and Aurelius have been contacted for comment.