The Body Shop Canada, the Canadian subsidiary of the global beauty brand with 105 stores across the country, announced Friday it has commenced restructuring proceedings by filing a Notice of Intention (NOI) to Make a Proposal pursuant to the Bankruptcy and Insolvency Act (Canada).
It will be closing 33 Canadian stores.
“Following the commencement of administration proceedings in the United Kingdom by its parent company, The Body Shop Canada is commencing this NOI process to obtain a stay of proceedings to provide additional breathing room while it evaluates its strategic alternatives and implements certain restructuring initiatives,” said the company in a news release.
“All of The Body Shop Canada’s 105 store locations are currently open for business, however online sales via Canada’s ecommerce store will stop and certain stores noted below will close in the near term.”
As part of the NOI process, The Body Shop Canada said it is immediately commencing liquidation sales at the following 33 closing stores:
BC:
- Hillside Shopping Centre (Victoria)
- Semiahmoo (White Rock)
- Village Green (Vernon)
Alberta:
- Londonderry Mall (Edmonton)
- Medicine Hat Mall (Medicine)
- Park Place (Lethbridge)
- Sunridge Mall (Calgary)
- Lloyd Mall (Lloydminster)
- Medicine Hat Mall (Medicine Hat)
- Park Place (Lethbridge)
Saskatchewan:
- Lawson Heights (Saskatoon)
- The Centre (Saskatoon)
- Midtown Plaza (Saskatoon)
- Cornwall Centre (Regina)
Manitoba:
- Shoppers Mall (Brandon)
Ontario:
- Bayview Village (Toronto)
- Queen Street East (Toronto)
- Rideau Centre (Ottawa)
- Carlingwood Mall (Ottawa)
- Fairview Park Mall (Kitchener)
- Cataraqui Town Centre (Kingston)
- Lynden Park Mall (Brantford)
- Stone Road Mall (Guelph)
- Dufferin Mall (Toronto)
- The Shops at Don Mills (Toronto)
- Toronto Pearson Term. 1 (Toronto)
- Lambton Mall (Sarnia)
- Place d’Orleans (Orleans)
- Timmins Square (Timmins)
- Lansdowne Place (Peterborough)
Atlantic Canada
- Corner Brook Plaza (Corner Brook)
- Champlain Place (Dieppe)
- Mayflower Mall (Sydney)
- McAllister Place (Saint John)
- Truro Mall (Truro)
Alvarez & Marsal Canada Inc. was appointed as the Proposal Trustee.
The company also announced Friday that effective today, March 1, 2024, The Body Shop US Limited has ceased operations.
“Body Shop was indisputably a cultural pioneer with respect to its courageous stance on animal testing. A position which, at the time, was indeed unique within the industry. Regrettably, like many innovators, they could do little but watch as rivals followed suit, erasing any material competitive advantage Body Shop possessed,” said Doug Stephens, Founder of Retail Prophet.
“Without continued strategic evolution, the brand simply lost much of its relevance to a new generation of consumers.”
Added Bruce Winder, Retail Analyst & Author: “Very sad to see another retailer in serious trouble. Once differentiated with its purpose positioning, The Body Shop faced strong competitors such as Lush who did it better.
“The retailer also failed to innovate, lacking investment in digital technology. It became another cog in the massive L’Oreal wheel and was eventually sold to private equity.
“Finally, with economic headwinds and pressure on discretionary goods, consumers tightened their belts.”
“You always have to ask why brands fail the test of time and all of the strategies you are taught in business schools and the overwhelming presentations that say here is a new catchall idea that will save your brand,” said George Minakakis, CEO of the Inception Retail Group. “It is a myth to believe that just because you have an e-commerce site, being digitally native, you will succeed. The fundamentals of retailing remain the same. The right product for the right consumer at the right price and the right brand story has a foundation.
“Delivering all of that remains a challenge for many retailers. The Body Shop has faced the same marketplace challenges. Closing 33 stores tells me these are the stores losing money. But let’s not forget when retail brands are acquired as investments; they become financial instruments within other organizations. In these circumstances, they fail to invest internally in technology, product development, and overall brand innovation. That’s what’s happened here.
“Will restructuring save them? In my experience, I have seen many such situations, and recovering from this isn’t easy. Bad news follows bad news; what that means is that the consumer has heard that The Body Shop is filing for bankruptcy protection. The news wasn’t that they were opening another 100 stores. And that is the bad news that follows, consumers will simply move to other brands they can depend on. The Body Shop is not alone. I am tracking two other retailers in Canada, and I do not believe 2023 has been good for them. They, too, risk facing the same future as The Body Shop. The real impact is always with the employees and the suppliers who lose out.”
Michael Kehoe, Broker of Record at Fairfield Commercial Real Estate, said The Body Shop restructuring announcement is representative of the current turmoil in some sectors of the Canadian retail industry.
“The Body Shop could be considered a legacy retailer in the health and beauty category with success in the Canadian marketplace over the past 40 years. This category is very competitive with several dominant retailers gobbling up market share and appealing to a younger demographic with significant discretionary spending power,” he said.
“I feel that the Body Shop brand is dated and somewhat stale but can be repositioned to regain its place in the market. The closure of 33 stores as part of the restructuring process is no surprise and most of these locations are considered prime and will be leased up quickly in the current robust leasing environment.”
David Ian Gray, Founder/Strategist with DIG360 Consulting, said The Body Shop was an original.
“It was one of the first bath and beauty specialty shops and more notably one of the first purpose-driven retailers and brands. However over the years more and more store and web based competition arrived and anti-cruelty and sustainability became ubiquitous plays in the space. The Body Shop lost its competitive advantages even as it relentlessly tried to be a global brand. It has been struggling for a number of years,” he said.
“It should be noted that the Canadian operation has been one of the global bright spots (along with the UK). The US has been an ongoing challenge. Canada and the US are run out of Toronto as separate corporate entities. This regional leadership of late has been making some bold, promising moves to drive sales. Their legs were cut out from under them when the PE firm pulled the plug in the UK without warning a couple of weeks ago, after having promised a turnaround when they bought the brand in November.
“It is said that there was deep discounting by Natura who ran the operation until after Holiday 2023, and that discounting compounded weak demand to bring in results much below expected globally and certainly in the UK.”
Retail is done best when in the hands of retailers, added Gray.
“L’Oreal then Natura are not retailers. In fact Natura admitted its lack of retail expertise was blocking its ability to revive the brand. The latest owner is a PE firm. This firm may well end up with the brand or at least valuable parts of it after bankruptcy plays out. One wonders if this was the plan all along. They claim it was not.
Canada will again lose a head office and the related opportunities for Canadian professionals to grow and develop.”
Last fall, The Body Shop began growing its retail presence in Canada with shop-in-shop locations at Shoppers Drug Mart stores.
In a December interview with Retail Insider, Jordan Searle, the company’s North American President, said the brand did not open any new locations in Canada in the past year but it has been undergoing renovations of existing locations.
“Obviously with 108 stores, we’re fairly well penetrated across Canada. So it’s really been a question of us upgrading our stores to our new workshop concept. The most notable of those would be our Yorkdale store which was back in August,” he said, adding that about nine stores have gone through the process.
“And more to come.”
The Body Shop International Limited (The Body Shop), a once pioneering beauty brand known for its cruelty free heritage and ethical beauty products was acquired from Natura & Co. by AURELIUS GROUP in December 2023.
Yet another retailer that is failing to recognize that successful operations in Canada must include a presence in all of its markets, Quebec included. The Body Shop exited Quebec a while ago, and that was the first sign of its dire situation… Today’s announcement is one more step towards a full exit.
There are still two items I regularly buy from the Body Shop. I have to order online because they closed the last store in Quebec a few years ago. Now I’ll have to go to Ontario, or have someone who lives near a store that’s still open send things to me. What’s odd is that there person who’ll most likely do that lives in B.C. where there are no Yves Rocher stores.
The words “private equity” make me cringe. Investors don’t care about consumers.
Those are some significant locations to close. And dropping online seems like a big mistake. This could be the end for the chain.
Sad they are currently have closed their online site and stores are currently not accepting gift cards as payment. I am hoping they are able to turn things around, bring back some favourites like Pinita Colada, Passion Fruit and Raspberry. Hope customers with gift cards are not out of luck from ever using them. So unfair, they were paid for and should be accepted.
Does the body shop intend to keep erin Mills town centre location open? I just recently started shopping with you
Body shop should never have changed their products sure make vegan products but leave awsome scents like white musk the same