“It was a stampede.” Nina De Jonge, owner of The Body Shop in Kortrijk, had to speak to many worried customers on Tuesday. After the British branches of the cosmetics chain received protection from creditors and were placed under the supervision of a curator, something similar is likely to happen on the European mainland. Almost all Belgian Body Shops remained closed on Tuesday and Wednesday pending news.
The location in Kortrijk is an exception, because De Jonge operates the business as an independent franchisee. “It is a difficult situation, I don’t know what is going to happen and the customers are panicking,” she says. “They are afraid that they will no longer be able to buy their trusted products in the future.”
According to De Jonge, The Body Shop certainly has a future. “Maybe in a slimmed-down form. There may have been too many branches in Great Britain, but that is certainly not the case in Belgium. I still serve a large target audience and have my regular customers. There is more competition and the concept may be less hip, but our identity is still valuable.”
Uncertainty at call center
According to reports on specialist websites, the owner of The Body Shop, the German investment vehicle Aurelius, has requested protection from creditors for the German, Belgian, Luxembourg and Austrian branches. This protection would be a condition for the sale by Aurelius to Alma24, an investment company of investor Friedrich Trautwein. He is a businessman who has run companies owned by Aurelius in the past.
According to Retail Week, Trautwein would also like to buy the Swedish and Danish stores, but would not have reached an agreement on this with Aurelius. “The staff in France, Spain, Portugal, Denmark and Sweden do not know who is responsible now, what the future holds and whether the employees will still be paid this month,” writes Retail Week. One of the problems would be that the British head office would no longer pay for the continental distribution center in Frankfurt. That distribution center is owned by a subcontractor. The Body Shop’s webshop is offline in several countries, including Belgium. The fear is that orders placed will no longer be delivered. The call center is still staffed, but the telephone operators are also in uncertainty. “We cannot answer your questions. Customers will be kept informed of the situation by email,” it said.
Opaque structure
According to the Retail Detail newsletter, The Body Shop would be in much worse financial shape than Aurelius had estimated at the time of purchase in December last year. Aurelius paid 207 million pounds (242 million euros) to the previous owner, but 90 million pounds (105 million euros) of that is subject to certain conditions. The Body Shop’s international structure is opaque. In Belgium there is no separate management. Legally, the Belgian stores are part of a Dutch company. The stores in the Benelux and France are managed from Paris. The unions are also in the dark, they have no union representatives in the stores. “There is currently no question of bankruptcy or reorganization,” says Louis Salvi of BBTK. Kristel Van Damme of ACV Puls is also unaware of any legal initiatives to restructure the company.
The Body Shop has 900 stores in 20 countries worldwide. 7,000 people work there. In addition, there are 1,600 stores in 69 countries that are operated by franchisees.