The Body Shop goes into administration leaving thousands of jobs at risk

The Body Shop has entered administration after poor sales across the Christmas shopping season

The UK arm of The Body Shop has entered into administration, leaving thousands of jobs at risk, it has been confirmed.

Insolvency experts at FRP Advisory have been brought in to oversee the administration process after poor sales during the Christmas shopping season continued into January.

Administrators are expected to seek buyers for the business and its assets, but the process will nonetheless cast a shadow over the future of its stores and workforce.

The brand currently has 199 stores across the UK and employs over 2,000 people.

It comes just weeks after private equity firm Aurelius took over the business after buying The Body Shop for £207 million in November.

A source close to Aurelius told ITV News that The Body Shop sits in a "far worse financial state" than it had anticipated when it acquired the brand.

Body Shop founder Anita Roddick gives a demonstration for Princess Diana at the opening of a new headquarters in 1986. Credit: PA

The retailer was founded in 1976 by Anita Roddick and her husband Gordon as one of the first companies to promote so-called ethical consumerism, focusing on ethically produced cosmetics and skincare products.

Speaking about the move to appoint administrators amid financial difficulty being faced by the cosmetics chain, ITV News Economics Editor Joel Hills said: "Plan A will be to find a buyer for the business in its current form.

"And, on the face of it, that seems like a pretty tall order but we don't know how loss making The Body Shop is and we don't know how much debt it is carrying around.

"One important detail is that Aurelius has a security over a part of The Body Shop's debt, which means Aurelius is a creditor as well as an owner of the business. Something that will give the firm leverage and influence over the insolvency process.

"That may well mean that the administrator ends up cutting costs by closing shops and making people redundant, renegotiating contracts with landlords and then handing the business back to Aurelius."

Lush chief executive, Mark Constantine told Joel Hills: "The business will survive in some shape or form, but it is probable that half the network of shops will close."

In a statement, The Body Shop said: "Taking this approach, provides the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalizing this iconic British brand.

"The Joint Administrators will now consider all options to find a way forward for the business and will update creditors and employees in due course.

"Creating a more nimble and financially stable UK business, is an important step in achieving this.

"The Joint Administrators will continue to trade the business in administration, ensuring customers will be able to continue to shop in store and online for their favourite products."

The Body Shop had previously been facing an "extended period of financial challenges" under past owners, that pushed Aurelius to close The Body Shop at Home and sell businesses across Europe and Asia.

The business employed around 10,000 people worldwide at the time of the takeover.

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...