Ethical shopping titan The Body Shop has collapsed into administration. What went wrong?

The Body Shop was once a titan of the high street.

Throughout the 1980s and 1990s, the store ­– known for its exotic bath pearls, lotions and the famous ‘white musk’ aroma, which it still markets as the ‘scent of a generation’ – attracted millions of eager shoppers.

But the one-time bath behemoth is in a crisis. The Body Shop has appointed administrators, a process that is putting 2,000 jobs at risks and will likely cause dozens of shop closures and mass redundancies.

For staff at the chain’s 200 UK stores, it’s troubling news. What went wrong?

Poor sales over the vital Christmas period are partly to blame. But according to experts, The Body Shop has “lost touch with its consumers.”

“It failed to move with the times. The consumer has changed, but The Body Shop didn’t keep up,” says Allyson Stewart-Allen, a retail expert and CEO of International Marketing Partners.

“It’s heart-breaking, really, because the brand was at the forefront of shopping with a conscience. But they got lost.”

The Body Shop was founded in 1976 by the late Dame Anita Roddick. Operating out of a small shop in Brighton, it offered natural products and eschewed animal testing ­– a rarity at the time. Roddick even recycled her bottles, largely due to a shortage of containers.

The idea was a hit, attracting legions of young shoppers with its ethical credentials. By 1984, it was valued at more than £80m, up from its £4,000 initial valuation.

“The Body Shop was ahead of the curve. But now competitors have caught up and it’s a really crowded space; there is intense competition from brands like Lush,” added Stewart-Allen.

Roddick was passionate about social issues. Her husband Gordon Roddick helped Lord John Bird establish the Big Issue in 1991, providing the initial funding to get the magazine off the ground.

“He gave me the idea – from the United States – of a street paper, and encouraged me and provided funding and wouldn’t take no for an answer; meaning we invented The Big Issue,” Lord Bird wrote last year.

Gordon and Anita and continued to nurture and support the company in subsequent years. On the 10^th anniversary of her 2007 death, Lord Bird paid tribute to his “extraordinary” friend, “one of the most important people in social and ethical trading”.

“She had deep wells of energy and curiosity, and even deeper wells of commitment. She made business an increasingly useful tool for political and social action,” he said.

Stewart Allen continued: “A series of incremental things meant they essentially stood still. Their products, their in-store experience, their activism – they are stuck in the middle with no perceived points of difference.”

The Body Shop was known for its ethical campaigning. But in 2006, the chain was bought out by L’Oreal for more than £650m.

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The deal was controversial; Roddick had always campaigned against the ‘monstrous’ practises of the beauty industry. The founder claimed the sale would allow The Body Shop to act as a ‘Trojan Horse’ against Big Beauty, but tragically died just 18 months after the sale.

The sale marked a turning point for the chain.

“If the owners at the top don’t have the ethical stance that the brand is trying to represent, the consumers see through the mismatch straight away,” said Dr Amna Khan, a senior lecturer at Manchester Metropolitan University and consumer behaviour expert.

“It doesn’t build trust, it doesn’t build credibility. The sale to L’Oreal diluted the brand, it commercialised it. The consumer started pulling away and looking for alternatives.”

Consumers had always bought into this ‘activist vision’, explains Stewart-Allen. The founder was the ‘soul’ of the operation.

“[After the L’Oreal sale], Anita Roddick was no longer the face of the brand. That’s a nail in the coffin,” she said. “Buying The Body Shop was buying into the views: into the no-animal testing, and the activism about slavery and trafficking. It’s perhaps lost that.”

After a decade, L’Oreal decided to sell The Body Shop to Brazilian brand Natura; in November 2023 Aurelius – a private equity firm ­– purchased it.

The brand no longer has a monopoly on the natural and sustainable beauty space. Lush, Neal’s Yard, Boots, Superdrug and supermarket chains offer their own alternatives.

But they’re all following in the vision of The Body Shop’s founder. With restructuring and redundancies imminent, the chain is at a key crossroads. If it is to succeed, its original ethical shopping vision must be prioritised, Stewart-Allen said.

“Ethical shopping is in the Body Shop’s DNA. If it drops that, it has a much smaller likelihood of surviving,” she added.

“Let’s hope it will reinvent itself around honouring that.”