The Body Shop Canada Files for Bankruptcy

After 44 years, The Body Shop Canada Ltd. says it will close 33 stores and halt its e-commerce operations as it seeks to restructure under the Bankruptcy and Insolvency Act. The news comes weeks after its parent company filed for creditor protection in the UK.

WHO: Founded in 1976 by the late businesswoman and human rights activist Anita Roddick and her husband Gordon, The Body Shop pioneered ethical consumerism and argued that business could be a force for good. Today, The Body Shop has 10,000 employees across 3,000 stores in about 70 countries and sells skincare, bodycare, and haircare products.

The Canadian division of The Body Shop has been a steady presence predominantly in malls since its expansion into the country in 1980.

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WHY: According to court documents, the Body Shop Canada Ltd. is seeking creditor protection and closing a third of its stores because its parent company stripped the Canadian arm of cash and pushed it into debt.

IN THEIR OWN WORDS: “Following the commencement of administration proceedings in the United Kingdom by its parent company, The Body Shop Canada is commencing this NOI process to obtain a stay of proceedings to provide additional breathing room while it evaluates its strategic alternatives and implements certain restructuring initiatives,” said the company in a statement. 

“All of The Body Shop Canada’s 105 store locations are currently open for business, however online sales via Canada’s ecommerce store will stop and certain stores noted below will close in the near term.”

DETAILS:

• The Body Shop Canada has initiated restructuring proceedings under Canada’s Bankruptcy and Insolvency Act. The restructuring and turnaround management firm Alvarez & Marsal Canada Inc. was appointed Proposal Trustee. 
• A court filing showed the company owes over $3.3 million to unsecured creditors and about $16,400 to secured creditors.The Body Shop Canada will close 33 of its 105 stores and halt its e-commerce operations as it seeks to restructure under the Bankruptcy and Insolvency Act. 
• The Canadian branch had 784 workers before the filings were made and about 200 will be laid off by the end of March, according to the court documents. Twenty head office employees and two contractors had their employment terminated Friday, the documents show.
• The Body Shop Canada made about $12 million before interest and taxes in the key holiday shopping period from the start of November 2023 to the end of January 2024, which wound up with The Body Shop International, Jordan Searle, who heads the Canadian arm, said.
• Searle said the parent company had taken $42.9 million from The Body Shop Canada’s accounts over that period and remitted $21.8 million for payables and payrolls.
• The Body Shop Germany GmbH submitted a corresponding application to the Düsseldorf District Court on February 14.
• The Body Shop UK business entered administration in early February, appointing FRP Advisory to oversee the process. 
• In November 2022, former brand owner Natura &Co made a deal to sell The Body Shop to the Aurelius Group in a $254 million deal. 
• L’Oréal sold The Body Shop to Natura &Co in 2017 in a $1.1 billion deal.
• Anita Roddick sold The Body Shop to L’Oréal in 2006 for $1.14 billion.