The Body Shop Canada announces it will close 33 stores and terminate its e-commerce operations as part of its restructuring under the Bankruptcy and Insolvency Act.
The Canadian subsidiary of the international cosmetics brand confirmed Friday that it would immediately begin the liquidation of nearly a third of its 105 stores.
The company did not say how many workers would lose their jobs due to store closures in cities including Toronto, Ottawa, Edmonton, Calgary, Saskatoon and Saint John, New Brunswick.
A court filing says the company owes more than $3.3 million to unsecured creditors and about $16,400 to secured creditors.
The American branch of the company has also ceased operations, The Body Shop Canada also said on Friday.
The moves come weeks after the company’s parent company, The Body Shop International, entered into administration in the UK, a procedure which allows companies to restructure or cease trading without having to repay their debts.
British media reported on Thursday that 75 of the brand’s UK stores would close and 40% of staff at its headquarters would be made redundant.
Sell elsewhere
In Canada, the company wants to keep most of its stores. It said in a statement that it hopes the legal proceedings in Ontario will give it “room to maneuver” while it evaluates its strategic solutions and engages in restructuring.
As The Body Shop celebrated 44 years in Canada, the company strived to improve. The brand sells assortments of bath, body, hair and skin products, in an environmentally friendly philosophy.
The retailer’s Canadian division has operated primarily in malls since expanding into the country in 1980, but in recent years it has faced several challenges. E-commerce and the growth of beauty brands like Sephora, Bath&Body Works and Lush have notably brought intense competition to the sector.
Faced with this situation, The Body Shop Canada opened select stores in 2022 with a new “workshop” concept that taught customers about sustainability practices and explained who makes their products and what consumers can do to get involved. for the environment and community activism.
The company also began selling an assortment of products, including its popular body butters, in 25 Pharmaprix stores (Shoppers Drug Mart in provinces other than Quebec) last summer with another 25 locations expected to offer the products this year .
The move marked the first time Body Shop products were sold in Canada outside of the company’s stores. It aimed to make purchasing its merchandise even more convenient.
Redemption
The partnership preceded the sale of parent company Body Shop International to European private equity firm Aurelius Group for £207 million (C$355 million) late last year.
The Aurelius firm is known for buying companies in difficulty, which it restructures and sometimes resells. Over the past 20 years, it has acquired British home sales chain Ideal World, foot care company Scholl and British pharmacy chain Lloyds Pharmacy.
The Body Shop was founded by the late environmental activist Anita Roddick in 1976 to provide consumers with cosmetics and skincare products that are not tested on animals and developed through fair relationships with farmers and suppliers.
As the company increased its number of stores, it changed hands several times. It was acquired in 2006 for 652 million pounds (CA$1.1 billion) by beauty giant L’Oréal, which ultimately sold the company to Natura, Avon’s Brazilian owner, in 2017 for 1 billion euros (CA$1.4 billion). Natura sold the company to Aurelius.
When the sale of Aurelius was announced, the company said The Body Shop owned more than 900 stores in 20 countries and had partnerships with master franchisees operating 1,600 stores in 69 regions.