‘It didn’t change’: Body Shop Canada files for bankruptcy protection, plans restructuring

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The Physique Store Canada Ltd. says it should shut 33 shops and halt its e-commerce operations because it seeks to restructure below the Chapter and Insolvency Act.

The Canadian subsidiary of the worldwide cosmetics model introduced Friday that it’ll instantly start liquidating nearly a 3rd of its 105 shops.

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The corporate didn’t say what number of staff would lose their jobs because of the shop closures that span places in cities together with Toronto, Ottawa, Edmonton, Calgary, Saskatoon and Saint John, N.B.

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A court docket submitting confirmed the corporate owes greater than $3.3 million to unsecured collectors and about $16,400 to secured collectors.

The corporate’s U.S. arm has additionally ceased operations, The Physique Store Canada stated Friday.

The strikes come weeks after the corporate’s dad or mum, The Physique Store Worldwide Ltd., filed for administration — a course of in the UK that enables corporations to restructure or wind down with out paying off their money owed.

British media reported Thursday that 75 of the model’s U.Ok. shops would shut and 40 per cent of its headquarters workers could be laid off.

In Canada, the corporate desires to maintain the majority of its shops and stated in a press launch it hopes Ontario court docket proceedings will give it “respiration room” whereas it evaluates its strategic alternate options and engages in restructuring.

As a part of that restructuring, the corporate will stop accepting present present playing cards and promoting new ones, will not present refunds and can think about all new and former purchases ultimate, Jordan Searle, The Physique Store North America president, stated in a memo despatched to Canadian workers on Friday and obtained by The Canadian Press.

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44 years in Canada

Efforts to enhance the enterprise, which makes use of an environment-friendly ethos to promote an assortment of tub, physique, hair and skincare merchandise, have cropped up as The Physique Store marks 44 years in Canada.

The Canadian division of the retailer has been a gradual presence, predominantly in malls, since its growth into the nation in 1980. Lately, it confronted a number of challenges, together with the rise of e-commerce and the expansion of magnificence manufacturers Sephora, Bathtub & Physique Works and Lush, which introduced intense competitors to the sector.

As rivals sprouted up, Lisa Hutcheson, a retail strategist with J.C. Williams Group, noticed The Physique Store’s uniqueness eroded.

“It actually misplaced its worth proposition, and it didn’t change. It simply type of stayed the identical,” she stated.

“Except for just a few iterations on retailer design, there wasn’t actually ever any innovation, so I feel the patron simply began to look to the opposite manufacturers that have been coming alongside.”

The Physique Store Canada responded in 2022 by opening some shops below a brand new “workshop” idea that taught prospects about sustainability practices, defined who makes their merchandise and what shoppers can do to become involved in environmental and neighborhood activism.

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It additionally started promoting an assortment of merchandise, together with its in style physique butters, in 25 Consumers Drug Mart shops final summer season with one other 25 places anticipated to inventory the merchandise this 12 months.

The transfer marked the primary time Physique Store merchandise have been offered in Canada outdoors the corporate’s shops and was meant to make searching for its merchandise extra handy.

The Workshop shops and Consumers partnership preceded the sale of dad or mum firm The Physique Store Worldwide to European private-equity agency Aurelius Group for £207 million ($355 million) late final 12 months.

It actually misplaced its worth proposition, and it didn’t change. It simply type of stayed the identical

Lisa Hutcheson, a retail strategist with J.C. Williams Group

A memo despatched to Physique Store workers in america and obtained by The Canadian Press stated the dad or mum firm used a centralized money administration system.

Below this association, cash from worldwide divisions such because the U.S. was cleared from accounts each day by The Physique Store Worldwide, which might then ship money to its varied subsidiaries on an as-needed foundation, the memo from Human Assets director Jennifer Wale stated.

After just lately sweeping all of the funds from the U.S. arm’s account, Wale stated the dad or mum firm stopped paying distributors, making a “catastrophic scenario” the place the corporate was lower off from its funding “with no advance discover.”

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“Aurelius remained silent within the face of all pressing requests from the corporate, despite the fact that conscious of catastrophic penalties for North America,” Wale wrote.

The memo additionally notes that the U.S. division was given no advance discover of the U.Ok. administration proceedings.

When The Canadian Press requested Aurelius and The Physique Store Worldwide in February how The Physique Store’s Canadian operations might be affected by the U.Ok. administration proceedings, Methuselah Tanyanyiwa of Dentons World Advisors stated each refused to remark. The administration proceedings “solely have an effect on the U.Ok. market and never Canada,” Tanyanyiwa e-mailed. He didn’t reply to requests for remark Friday.

Buys faltering corporations

FRP Advisory, an accounting agency appointed to deal with The Physique Store’s U.Ok. proceedings, didn’t reply to repeated requests for remark in regards to the Canadian operations.

Aurelius is thought for purchasing faltering corporations it restructures and generally resells. During the last 20 years, it purchased British home-shopping channel Ideally suited World, the Scholl foot-care enterprise and U.Ok. drugstore chain Lloyds Pharmacy.

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In a November press launch, Aurelius accomplice Tristan Nagler positioned The Physique Store buy as a strategy to make “operational enhancements and re-energize the enterprise and assist to ship the following chapter of success.”

The Physique Store was based by late environmental activist Anita Roddick in 1976 to deliver shoppers magnificence and skincare merchandise not examined on animals and developed by way of truthful relationships with farmers and suppliers.

Roddick started with a store in Brighton, a seaside city south of London. As the corporate grew its retailer depend, it modified fingers a number of occasions. It was acquired in 2006 for £207 million ($1.1 billion) by magnificence large L’Oreal, which ultimately offered the corporate to Natura, the Brazil-based proprietor of Avon, in 2017 for 1 billion euros ($1.4 billion). Natura offered the agency to Aurelius.

When the Aurelius sale was introduced, the agency stated The Physique Store had greater than 900 company-owned shops in 20 international locations and partnerships with head franchisees who function 1,600 shops in 69 areas.

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The Physique Store shops closing in Canada:

Atlantic: Champlain Place (Dieppe, N.B.), Nook Brook Plaza (Nook Brook, N.L.), Mayflower Mall (Sydney, N.S.), McAllister Place (Saint John, N.B.), Truro Mall (Truro, N.S.)

Ontario: Bayview Village (Toronto), Carlingwood Mall (Ottawa), Cataraqui City Centre (Kingston), Dufferin Mall (Toronto), Fairview Park Mall (Kitchener), Lambton Mall (Sarnia), Lansdowne Place (Peterborough), Lynden Park Mall (Brantford), Place d’Orleans (Orleans), Queen Avenue East (Toronto), Rideau Centre (Ottawa), Stone Highway Mall (Guelph), The Retailers at Don Mills (Toronto), Timmins Sq. (Timmins), Toronto Pearson Terminal 1 (Toronto)

Prairies: Cornwall Centre (Regina), Lawson Heights (Saskatoon, Sask.), Lloyd Mall (Lloydminster, Alta.), Londonderry Mall (Edmonton), Medication Hat Mall (Medication Hat, Alta.), Midtown Plaza (Saskatoon), Park Place (Lethbridge, Alta.), Consumers Mall (Brandon, Man.), Sunridge Mall (Calgary, Alta.), The Centre (Saskatoon)

British Columbia: Hillside Procuring Centre (Victoria), Semiahmoo (White Rock), Village Inexperienced (Vernon)

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