The intensifying competition from online retailers and evolving consumer habits have prompted one of the most popular and biggest beauty retailers to cease operations in key markets. The Body Shop, a renowned UK-based cosmetics company, has recently filed for bankruptcy, resulting in the complete closure of its US-based operations. The company is also set to shutter numerous stores in Canada.
In an official release issued earlier this month, The Body Shop communicated the discontinuation of its US subsidiary, effective March 1, 2024. The announcement included detailed plans for the commencement of liquidation sales at 33 of its 105 stores in Canada. A noteworthy aspect of the announcement is the discontinuation of “online sales via Canada’s e-commerce store.” However, The Body Shop reassured its stakeholders that all physical brick-and-mortar locations in Canada will remain operational, at least for the immediate future.
So, what exactly went wrong at The Body Shop? How did the world’s most popular beauty retailer fail to lure customers despite the heightened demand for beauty products, especially among teens and young adults engaging in social media trends?
The Body Shop Shutting Down
The challenges faced by The Body Shop can be attributed to a combination of factors that influenced consumer behaviour and the competitive landscape within the global beauty industry. A primary contributing factor is the high inflation, recession, and massive job losses in 2022 and 2023. This economic turbulence post-Covid-19 pandemic has led to declining consumer spending on non-essential items like cosmetics, particularly within the middle-class demographic.
Another contributing factor to The Body Shop’s struggle to lure customers is its heavy reliance on brick-and-mortar stores. This has made it challenging for The Body Shop to compete with online retailers and other players in the beauty industry. This highlights the critical importance of establishing and maintaining a robust online presence for survival in today’s technology-driven era.
Retailers must be flexible and adapt to changing consumer preferences and economic conditions.
The Body Shop: History
The Body Shop International Limited, trading as the Body Shop, was founded in 1976 in the United Kingdom by Anita Roddick, a human rights activist and environmental campaigner. Over the years, the brand has witnessed several shifts in ownership, with notable transitions marking its corporate journey.
In 2006, cosmetics giant L’Oreal Group acquired The Body Shop for over a billion dollars, only to later sell it to Brazilian company Natura & Co in 2017, again for another billion dollars. In November 2023, Natura sold the Body Shop to AURELIUS Group, a global private equity group, for $254.32 million.
Surprisingly, despite Aurelius’s efforts, The Body Shop failed to keep demand for its beauty products among consumers, evident in lackluster trading over the Christmas and New Year period.
As of 2023, The Body Shop has over 2,500 retail locations across more than 80 countries, and its products are accessible through online platforms in over 60 markets.
