The cause of The Body Shop's bankruptcy and the closure of hundreds of stores in the United States and Canada

Bisnis.comJAKARTA – The Body Shop has reportedly gone bankrupt, marked by the closure of hundreds of outlets in the United States and Canada.

As of March 1, 2024, The Body Shop announced in its official press release that hundreds of its stores in the United States will no longer operate.

At least 33 of its 105 stores in Canada will soon be liquidated.

This operational shutdown not only impacts hundreds of stores in the United States and Canada, but also online sales.

“Online sales through Canadian e-commerce stores will cease, but all locations in Canada will remain open for the time being,” CNN said, quoted Tuesday (12/3/2024).

One of the causes of The Body Shop's bankruptcy is believed to be high inflation in recent years, which has been detrimental to traditional retailers.

“High inflation in recent years has hurt stores such as The Body Shop, which operate mainly in shopping centers and cater to the middle class,” the report continues.

It's a well-known fact that The Body Shop is famous for its products marketed as natural, sustainable, ethical and cruelty-free.

This company was founded in England in 1976 by human rights and environmental activist Anita Roddick. The Body Shop becomes the first company to ban testing of its products on animals.

In 2019, the company was certified as a “B Corp,” a designation given to companies that meet certain standards for transparency and environmental awareness.

By 2023, the product had expanded to over 2,500 retail locations in over 80 countries and was available for purchase online in over 60 markets.

Since its creation, The Body Shop has changed hands several times. The product was bought by cosmetics giant L'Oréal in 2006 for more than $1 billion, before being sold to Brazilian company Natura in 2017 for $1 billion.

The Body Shop has struggled in recent years. In its preliminary report for 2023, Natura noted that The Body Shop “(faces) challenges” with a year-on-year decline of 13.5% in 2022, a year the company called from “far from easy” for the brand.

The direct-to-consumer channel, which “benefited during the pandemic,” returned to “more normal pre-pandemic levels,” which further impacted sales figures, Natura said.

Late last year, The Body Shop was sold to asset management group Aurelius for around $266 million.

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Zera Carpenter

"Typical thinker. Unapologetic alcoholaholic. Internet fanatic. Pop culture advocate. Tv junkie."

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