Body Shop's entry into administration in UK raises concerns of HKers

British cosmetics brand The Body Shop, which operates at least 25 stores in Hong Kong, has entered administration in the UK months after the brand was acquired by a German private equity company Aurelius for HK$2032m (£207m). This has drawn mixed reactions from Hong Kong netizens.

Media intelligence firm CARMA saw over 500 mentions in Hong Kong since 14 February, the day when it was announced that Body Shop was placed under administration. Of these mentions, 5.5% carried a positive sentiment and 26.3% carried a negative sentiment.

Many netizens have pointed out that this development has no direct impact on Body Shop's operations outside of the UK and that being placed under administration doesn't necessarily imply immediate closure, said Charles Cheung, CARMA's HK GM.

"Some critics have raised concerns about Body Shop's market positioning, highlighting the competition from brands offering lower-priced alternatives that are perceived to be on par with or even surpassing Body Shop's quality," he added.

"Interestingly, we've also noticed that some netizens have shared their personal memories associated with Body Shop, with a few reminiscing about it being an iconic meeting spot for Hongkongers," he said.

Aurelius has appointed the accounting firm FRP Advisory as the administrator. In a statement viewed by MARKETING-INTERACTIVE, FRP said the brand had “faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector”.

"Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring," said the statement.

“Today, the directors of The Body Shop International have appointed Tony Wright, Geoff Rowley, and Alastair Massey of business advisory firm FRP as joint administrators of the company, which operates The Body Shop’s UK business,” the statement added.

Taking this approach provides the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalising this iconic British brand, said FRP. The joint administrators will now consider all options to find a way forward for the business and will update creditors and employees in due course.

The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand, relevant to customers and able to compete for the long term. "Creating a more nimble and financially stable UK business, is an important step in achieving this," the statement added.

The joint administrators will continue to trade the business in administration, ensuring customers will be able to continue to shop in store and online for their favourite products.

According to The Guardian, Aurelius said it had been “unable to revive the fortunes of the business” after dismal trading over Christmas and new year. The move also reportedly puts more than 2,200 jobs at risk within the cosmetic industry. 

The Body Shop was founded in 1976 by Anita Roddick, with a small shop in Brighton/UK. Headquartered in London with over 7,000 staff, it has operations in 89 markets with over 900 company-owned stores in 20 countries and partnerships with head franchisees who operate over 1,600 franchised stores in a further 69 geographies.

The brand’s product portfolio comprises natural ingredient-based bath & body, skin care, fragrance, hair care, make-up and gifting. The Body Shop has been B-Corp certified since 2019, further demonstrating its leadership in ethical sourcing, sustainability, and social consciousness. 

The brand was taken over by Aurelius in November last year and Aurelius will work with the management team to drive operational excellence across the group, leveraging its expertise and experience in the omni-channel retail and wholesale markets.  

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