The Body Shop ends US operations; to close Canadian stores amid bankruptcy

Despite having more than 2,500 retail locations in 80+ countries, The Body Shop has faced challenges in recent years and struggled to compete in the market, leading to its bankruptcy filing

The Body Shop, a renowned UK-based cosmetics company known for its natural, sustainable, and cruelty-free products, has decided to shut down all its operations based in the United States, and initiate the closure of numerous store locations across Canada after filing for bankruptcy, according to a report by CNN.

Following an official announcement earlier this month, The Body Shop revealed that its US subsidiary ceased operations effective March 1, marking the end of an era for the brand in the country. Additionally, the company disclosed plans to begin liquidation sales at 33 out of its 105 stores in Canada with immediate effect.

 

While online sales on Canada's e-commerce store will be discontinued, all Canadian locations will remain open for the time being.

The decision to downsize operations comes during a challenging retail landscape exacerbated by high inflation in recent years. Traditional retailers, particularly those operating in malls and catering to the middle class, have faced significant pressures, including The Body Shop.

The Body Shop was established in 1976 by human rights activist and environmental campaigner Anita Roddick. The brand quickly gained recognition for its commitment to ethical practices, including a steadfast prohibition on animal testing for its products. L'Oreal acquired the brand in 2006 and later sold it to Brazilian company Natura in 2017.

In 2019, the company achieved B Corp certification, highlighting its dedication to transparency and environmental conscientiousness.

Despite its global reach, with over 2,500 retail locations in more than 80 countries and a strong online presence, The Body Shop has faced challenges in recent years and has struggled to maintain its foothold in a rapidly evolving market.

In 2022, The Body Shop experienced a year-over-year decline of 13.5 per cent, prompting concerns about its long-term viability. The impact of the Covid-19 pandemic, which initially boosted direct-to-consumer channels, eventually normalised, contributing to dwindling sales figures.

In November 2023, The Body Shop was sold to asset management group Aurelius for about $266 million. However, the challenges persist, culminating in the recent decision to restructure its North American operations in the face of financial difficulties.