The Body Shop edges closer to UK rescue deal

The UK arm of cosmetics group The Body Shop is in exclusive rescue talks with investment firm Aurea, administrators brought in to save parts of the distressed company said Wednesday.

Body Shop International is close to a deal with the Aurea-led consortium, FRP Advisory said in a statement, adding that should a deal be struck, the new team would be managed by Charles Denton, former chief executive of beauty brand Molton Brown.

“While the deal is not yet complete, we believe the combined experience of the consortium, together with the existing management team, represents the best outcome for creditors and will ultimately ensure the long-term success of The Body Shop,” the statement said.

“A period of due diligence will now take place, with the intention to complete the transaction in the coming weeks.”

The 50-year-old Body Shop business, renowned for ethical hair and skin products, entered administration in February, which led to FRP Advisory being brought in to try salvage part of the group.

Soon after, The Body Shop announced it would shutter almost half of its 198 stores in Britain. On collapsing, it employed about 1,500 staff across its UK stores, and a total 7,000 worldwide.

German private equity firm Aurelius had bought The Body Shop only in November, but the retailer ran into trouble in a tough economic climate over the key Christmas trading period.

The Body Shop was founded in 1976 by Anita Roddick and has become a staple of the British high street, but it has been under various owners since she sold it to French cosmetics giant L’Oreal in 2006.

Roddick, who died in 2007 from a brain haemorrhage, rapidly expanded the business from modest beginnings with a determination to offer products that had not been tested on animals.

She also set out to make her business environmentally friendly, with customers encouraged to return empty containers for refilling at the original shop in Brighton, on England’s south coast.