As The Body Shop enters an exclusivity agreement with investment firm Auréa, Retail Week takes a closer look at its prospective new owners and what a potential takeover could mean for the troubled beauty chain.
The Body Shop has been in administration in the UK for five months. In that time, its store estate has been nearly cut in half resulting in 489 job losses in the UK. In the same period, its international arms in mainland Europe, North America and Canada all filed for bankruptcy suffering from the uncertainty in its home market.
Administrators FRP Advisory announced that an exclusivity agreement had been reached with a consortium led by investment firm Auréa. While nothing is yet set in stone, many in the sector can hope this could be the beginning of the end for The Body Shop’s troubles.
Retail Week takes a closer look at who the new prospective owners of the iconic British beauty chain are and whether or not they can pick up the pieces of the broken retailer and go some way to restoring its proud heritage in the beauty space.
Who is Auréa?
Auréa is an investment platform “focused on beauty, wellness and longevity”, led by British tycoon Mike Jatania alongside founding partners Paul Raphael and Andrew Vagenas.
According to Auréa, its team brings over “30 years of combined experience” in the beauty and personal care space and has appointed former Molton Brown chief executive Charles Denton to lead The Body Shop if the acquisition goes through.
Jatania was previously chief executive of the Lornamead group, with a history of acquiring and investing in heritage beauty and personal care brands from companies such as Unilever, Sara Lee, Proctor & Gamble, Wella AG and Henkel.
The group built up a portfolio of over 30 brands selling in over 50 countries, including Yardley London fragrances and bath luxuries, Finesse hair care and Lypsyl lip balm, before being sold in 2013.
A source close to The Body Shop says they are “cautiously optimistic” about the new partnership.
“I would be cautiously optimistic. I think what we’ve got here in Charles and Mike is two people who know the beauty industry.
“I think one of the issues in the past has been that Aurelius didn’t really have experience in this category and maybe underestimated what it was that it was getting into.
“Mike’s been involved in working with heritage British brands in the past and Charles has a track record of building up Motlon Brown from being a little failed hairdresser on South Molton Street to a big business that was acquired by Kao Corporation in Japan for a very big valuation.”
Lumina Intelligence senior retail analyst Beth Bloomfield says Charles Denton “is a seasoned beauty professional” and after what The Body Shop has been through in the past year, having someone like him to lead the business will come as a relief.
She adds: “Denton has worked his way through the ranks to become chief executive of Molton Brown, a much beloved British brand not unlike The Body Shop. It is also a vertically integrated retailer with its own manufacturing and operates on a global scale through wholesale and retail.
“He is likely to be invested in the heritage of The Body Shop and may pull on this to reinvigorate the brand and the history behind it. At Erno Laszlo [the skincare brand where Denton is currently chair] it used its archives to its advantage, bringing back its ‘Shake-It’ skin tint coveted by Marilyn Monroe.”
What next?
The beauty chain may be on the brink of being saved. But, as its recent history shows, that doesn’t guarantee smooth sailing.
With its long-drawnout administration, The Body Shop has lost most of its senior management and has fallen behind in the new product development cycle.
One source says: “The Body Shop’s been drifting for five months. That’s a long time for a business to be in administration. Lots of good people have left, the new product development cycle has been put on hold and there’s been a tremendous amount of damage done to the business. I think the thing that’s really important about the future is whether Auréa has the resources to invest.
“There’s evidence that they understand brands, they understand beauty, and that’s really good news. But the important thing is for The Body Shop to fulfill its potential there will need to be a period of investment to get it through, get it back on its feet after administration.”
While industry insiders seem optimistic about its prospective new home and place a lot of faith in Denton, it’s going to take more than just an experienced hand to pick up the pieces of a retailer as bruised and battered as The Body Shop.
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