Body Shop Canada files for bankruptcy protection, plans restructuring

Vernon to lose Body Shop

The Body Shop in Vernon's Village Green Centre is closing.

The Body Shop Canada Ltd. says it will close 33 stores - including the one in Vernon - and halt its e-commerce operations as it seeks to restructure itself under the Bankruptcy and Insolvency Act.

The Canadian subsidiary of the international cosmetics brand announced Friday that it will immediately begin liquidating almost a third of its 105 stores. 

The company did not say how many workers would lose their jobs as a result of the store closures that span locations in cities including Toronto, Ottawa, Edmonton, Calgary, Saskatoon and Saint John.

A court filing showed the company owes more than $3.3 million to unsecured creditors and about $16,400 to secured creditors.

The company's U.S. arm has also ceased operations, The Body Shop Canada said Friday.

The moves come weeks after the company’s parent, The Body Shop International Ltd., filed for administration — a process that allows companies to restructure or wind down without paying off its debts — in the U.K. 

British media reported Thursday that 75 of the brand’s U.K. stores would close and 40 per cent of its headquarters staff would be laid off.

In Canada, the company wants to keep the bulk of its stores and said in a press release it hopes Ontario court proceedings will give it “breathing room" while it evaluates its strategic alternatives and engages in restructuring. 

Efforts to improve the business, which uses an environment-friendly ethos to sell an assortment of bath, body, hair and skincare products, have cropped up as The Body Shop marks 44 years in Canada.

The Canadian division of the retailer has been a steady presence predominantly in malls since its expansion into the country in 1980, but in more recent years has faced several challenges, including the dawn of e-commerce and the growth of beauty brands Sephora, Bath & Body Works and Lush brought intense competition to the sector. 

As rivals sprouted up, Lisa Hutcheson, a retail strategist with J.C. Williams Group, saw The Body Shop's uniqueness erode. 

"It really lost its value proposition, and it didn't change. It just sort of stayed the same," she said.

"Aside from a few iterations on store design, there wasn't really ever any innovation, so I think the consumer just started to look to the other brands that were coming along."

The Body Shop Canada responded in 2022 by opening some stores under a new “workshop” concept that taught customers about sustainability practices, explained who makes their products and what consumers can do to get involved in environmental and community activism.

It also began selling an assortment of products, including its popular body butters, in 25 Shoppers Drug Mart stores last summer with another 25 locations expected to stock the products this year. 

The move marked the first time Body Shop products were sold in Canada outside the company’s stores and was meant to make shopping for its merchandise even more convenient.

The Workshop stores and Shoppers partnership preceded the sale of parent company The Body Shop International to European private-equity firm Aurelius Group for £207 million ($355 million) late last year.


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