Ethical retailing can come at a cost as former Body Shop suppliers are finding out. The unsecured creditors from the beauty retailer’s administration last year, including manufacturers, landlords, local councils and small charities, are to receive just 16-27% of the £219 million owed to them when the retailer went under.
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The retailer, which was founded by Anita Roddick in 1976 and was once part of both L’Oréal’s and Natura’s extensive beauty portfolios, fell into administration via its previous owner, German restructuring specialist Aurelius.
At the time of its collapse, administrators said the Body Shop’s debts totalled over £276 million, The Guardian reported.
The brand was rescued by a consortium led by the British cosmetics tycoon Mike Jatania in September, paying at least £44.3 million for the retailer, saving 1,300 jobs. However, its initial failure came at a cost of 80 stores closed and 750 jobs lost, taking its UK high street tally to 113.
In their latest update, administrators from FRP said UK tax authorities would be paid in full from the proceeds of the administration and workers would receive holiday pay owed. However it confirmed unsecured creditors owed £219 million in total, would receive only between 16% and 27% of the money owed.
The report shows the Body Shop owed millions of pounds to suppliers around the world, the most to Avon, the cosmetics group owned by Natura, at just over £13 million for products it manufactured.
The retailer’s former owner Aurelius did not receive any payment, the report said.
The group, now run by the former Molton Brown boss Charles Denton, has reportedly said the business “had achieved a profit in its first 100 days”.
