The Body Shop’s UK administrator is rumoured to be mulling a company voluntary arrangement (CVA) in a bid to secure the troubled business’s future.
Insolvency practitioners at FRP Advisory have allegedly drawn up proposals for a CVA which would see the cosmetics brand enter talks with landlords about rent cuts, as well as other creditors.
FRP reportedly said a CVA would “allow the company to be rescued and exit for administration”, according to Sky News, which claims to have seen the proposals sent to creditors on 4 April.
FRP also noted that “in the event that a CVA cannot be agreed, the joint administrators will proceed with a sale of the business and assets,” reported the publication.
The proposals are said to have revealed the depths of The Body Shop’s financial problems to creditors, which have been inherited by private equity firm Aurelius after it acquired the company in 2023 from Natura & Co.
A proposed CVA is the latest move by Aurelius to save the ethical beauty retailer after months of upheaval.
The Body Shop’s French subsidiary fell into administration on 4 April, filing for bankruptcy with the Paris commercial court, while its Denmark arm filed for bankruptcy on 29 February.
This followed the collapse of the ethical beauty retailer’s UK and German arms into administration on 13 February.
So far, 197 stores have closed in the UK as part of its restructuring process.
The store closures and job cuts come after an extended period of financial challenges for The Body Shop.
This included multiple consecutive quarters of losses with former owner Natura & Co.
FRP Advisory is also allegedly exploring the claim that millions of pounds were taken out of the company before it fell into administration.
Read more:
- The Body Shop’s next steps: Inside an administration journey
- The Body Shop is ‘opportunistic’, not failing, says ex-CEO
- Why does no one know what to do with The Body Shop?
- The Body Shop's vulnerable suppliers fear being stuck with $1 million of stock
- Opinion: The Body Shop forgot Anita Roddick's storytelling superpower
