The Body Shop’s fair trade suppliers, who work with vulnerable people from the Amazon and Africa, say they have been left with more than £792,000 ($1m) worth of beauty ingredients that may never be ordered or paid for.
The ethical beauty retailer, which filed for administration of its UK and German arms last week, has ties with 18 community fair trade partnerships around the world via its own scheme.
Several suppliers told The Guardian that they could be stuck with hundreds of thousands of dollars worth of stock if the business goes bust – a figure they said was very meaningful to families living on low incomes in remote areas.
The suppliers said they had no written contract with The Body Shop, but had produced an agreed amount of product for the retailer for many years.
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Most of the community projects do not directly supply the business but sell the ingredients to intermediaries including oil refiners or one of the group’s more than 20 cosmetics and beauty product manufacturers.
The producers are concerned that if manufacturers are not paid by administrators, they in turn will not be paid.
Administrators at FRP said the retailer’s UK arm continues to trade as usual and that creditors will be kept informed as the process moves forward.
It said that any supplier debts will be lined up behind many other creditors – and orders could shrink if the stores are closed.
The Body Shop owner Aurelius, which snapped up the business for £207m in a deal finalised last month, is understood to be the main creditor with a secured debt which will ensure it gets paid.
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