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1000’s of jobs in danger as The Physique Store enters administration

The British arm of The Physique Store has formally entered administration, casting uncertainty over 200 shops and jeopardising hundreds of jobs.

Based by Dame Anita Roddick in 1976, the sweetness retailer filed a discover of intent to nominate directors on Monday after its new non-public fairness proprietor found the enterprise was in a far worse monetary state than beforehand believed.

Directors from FRP Advisory have been appointed by the corporate, tasked with exploring all choices to chart a path ahead for the enterprise.

With roughly 200 shops throughout the UK, it’s anticipated that as much as 100 of those may very well be shut right down to align with opponents comparable to Lush and L’Occitane. Moreover, a number of head-office positions are additionally in danger. The Physique Store employs round 10,000 workers globally, with roughly 2,000 in Britain.

FRP acknowledged that the sweetness enterprise would proceed to function throughout administration, making certain clients may nonetheless entry their favorite merchandise each in-store and on-line. The administration, they famous, presents stability, flexibility, and safety to pursue one of the best plan of action for The Physique Store and rejuvenate this iconic British model.

The Physique Store has confronted extended monetary challenges below earlier possession, coinciding with a difficult retail surroundings. Aurelius, a German non-public fairness agency, acquired The Physique Store from Natura, a Brazilian cosmetics group, in November final yr. Just lately, Aurelius divested the retailer’s loss-making operations throughout a lot of Europe and components of Asia.

Upon completion of the acquisition in January, Aurelius anticipated the corporate to have extra working capital than it really possessed to maintain operations. Nevertheless, it was found that the enterprise had a bloated value construction, coupled with weaker than forecasted buying and selling over the Christmas interval.

Sources counsel that Natura carried out an accelerated sale course of, limiting Aurelius’ potential to conduct thorough due diligence on The Physique Store’s monetary well being. Consequently, as soon as the acquisition was finalised, the non-public fairness agency discovered it essential to take extra important measures to handle the challenges dealing with the struggling magnificence retailer.

Mark Constantine, co-founder and chief govt of Lush, a rival moral cosmetics group, remarked on The Physique Store’s transition to manufacturing within the Philippines, noting the corporate’s shift in the direction of revenue maximisation has been accompanied by compromised values. Constantine emphasised the significance of sustaining model integrity, suggesting that customers discover when values are compromised.

The Physique Store’s journey has been fraught with challenges, with its idea of “retailing with a conscience” dropping a few of its edge as opponents undertake related messaging. Analysts consider that whereas The Physique Store continues to champion moral and cruelty-free values, these have develop into trade requirements, diluting the model’s distinctive promoting proposition.

Aurelius, famend for rescuing struggling companies, goals to revive The Physique Store’s fortunes by a leaner enterprise construction and by enhancing its on-line presence. Furthermore, there are plans to present the model a millennial-friendly makeover in hopes of attracting a brand new era of shoppers.