The Body Shop owner Aurelius is first in line for a payout after it put the business into administration, despite previously pledging to “drive operational improvements and re-energise” the company.
The investment company is set to leave other parties with losses after it solidified its position as the brand’s top creditor before going on to break-up the business, placing 2,000 jobs at risk, according to The Times.
In November, Aurelius purchased The Body Shop and promised to revive the business.
However, it has now sold lossmaking parts of the company and placed its British arm into administration.
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Labour MP on the Commons’ Treasury select committee Dame Siobhain McDonagh said: “Just before Christmas, Aurelius released a statement saying they would ‘re-energise the business’ and ‘deliver the next chapter of success’.
“Less than three months later they are putting the brand into liquidation and look like they are first in line to be paid. You have to question their sincerity. Did they ever intend to grow the business?”
She continued: “The same statement said that The Body Shop has been a pioneer in corporate social responsibility. If they want to live up to that, they had better put their shop and office staff first before paying out to themselves. There are more than 2,000 jobs at risk and I want to see them protected before private equity firms profit from this deal.”
The Body Shop formally appointed FRP as administrators to “accelerate restructuring” of its UK business earlier this week.
FRP said the administration gave the retailer “the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalising this iconic British brand”.
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