Marks & Spencer and Next Express Interest in The Body Shop as Auction Launches Amid Restructuring

Marks & Spencer and Next Express Interest in The Body Shop as Auction Launches Amid Restructuring

THE WHAT? U.K. heavyweight retailers Marks & Spencer and Next have made early expressions of interest in vegan beauty chain The Body Shop for a potential rescue bid as administrators prepare to launch an auction. FRP Advisory announced last week that The Body Shop would be put up for sale for the second time within a year after its initial plans for a company voluntary arrangement fell through.

THE DETAILS The Body Shop’s administrators decided to launch an auction of the chain after concluding that an alternative restructuring was not viable despite recent store closures and redundancies, which reduced the U.K. store estate from 198 to around 100 stores. This situation has prompted senior politicians in the U.K. to call for a review of the retailer’s decline and the subsequent job losses despite its British arm being profitable.

In March, The Body Shop fell into administration in the U.S. and Canada, leading to shuttered operations. Private equity firm Aurelius, which placed The Body Shop into administration within months of acquiring it late last year, is also understood to be preparing a bid to regain ownership of the business. FRP Advisory reported receiving expressions of interest from over 70 potential bidders, though many are expected to be eliminated as unsuitable buyers. FRP expects to conclude the sale during the summer.

The Body Shop, known for its visionary late founder Anita Roddick, faced a tough year. Brazilian beauty group Natura & Co sold the high street chain to Aurelius for $260 million, but it was later revealed that Aurelius paid only $4.5 million upfront, with the remainder tied to performance-related payments now unlikely to be executed due to the chain’s administration. The collapse raises questions about how much Natura can expect to receive beyond the initial payment.

THE WHY?  The Body Shop’s current situation underscores the volatility in the retail beauty market and the complexities of corporate acquisitions and restructuring. Marks & Spencer and Next’s interest signals potential lifelines for the brand, known for its ethical stance and innovative founder, Anita Roddick. As the auction progresses, the future of The Body Shop remains uncertain, but the outcome will undoubtedly shape its path in the evolving beauty retail landscape.