After The Body Shop International Limited filed for bankruptcy in the United Kingdom, its subsidiary in the United States and Canada is doing the same.

The Body Shop’s insolvency filing in the U.K. came “with no advance notice to, or pre-filing discussion with, the company and/or the company’s management,” according to the Chapter 7 bankruptcy filing on March 8.

Why did The Body Shop file for bankruptcy?

European private equity company Aurelius acquired The Body Shop International from Brazil’s Natura &Co for more than $250 million in November 2023. The company had about 250 stores in the U.K. and 3,000 globally. Three months later, The Body Shop’s U.K. business’ owners had put it in administration — a comparable status to filing for bankruptcy in the U.S.

The Body Shop was in a “much worse financial position” than expected, according to a Yahoo Finance report in February.

“According to The Body Shop’s latest financial accounts, its lease liabilities stood at £57m at the end of 2022,” The Telegraph reported in February 2024.

The company “maintained a centralized cash management system” in which the company’s “cash was swept on a daily basis to a concentrated account” and then “re-advanced” as needed to fund the company’s obligations, according to the Chapter 7 filing. The parent company then swept the U.S. subsidiary’s cash shortly before filing for insolvency in the U.K. in February.

When did The Body Shop go out of business?

The Body Shop International has told its U.S. subsidiary that it will not provide it with any funding to continue operations as usual “or to conduct an orderly winddown, and the company is otherwise without sufficient liquidity to continue operations past March 1, 2024.”

The Body Shop’s U.S. business has stopped selling at its 50 outlet locations. In Canada, it closed 33 of its 105 stores.

A press release from April 2023, when Natura &Co still owned The Body Shop, described the brand as “a truly omnichannel business with more than 2,500 retail locations (owned and franchised) in more than 80 countries; The Body Shop at Home direct to consumer channel in the UK and Australia; and an e-commerce presence in nearly 60 markets.”

Natura &Co acquired The Body Shop from L’Oreal in 2017 for about $1 billion.

Do you rank in our database?

Submit your data with this quick survey and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.