WASHINGTON (dpa-AFX) - The Body Shop, a well-known cosmetics brand, has filed for bankruptcy in the US and Canada.
The group's overseas businesses, which were once its most profitable, are now dealing with cash shortages due to the collapse of its UK parent company last month.
As a result, the company has filed for Chapter 7 insolvency, which means that assets will be sold off to clear debts. This puts about 400 jobs at risk, including those at a distribution center that still holds millions of dollars worth of stock.
The Body Shop Canada Limited, the Canadian subsidiary of the UK-based company, has also filed for a notice of intention according to the country's Bankruptcy and Insolvency Act. This is to obtain a stay of its parent's administration proceedings in the UK and provide additional breathing room while it evaluates its strategic alternatives and implements certain restructuring initiatives.
While the company is working on ways to restructure, 33 of its store locations in Canada are starting liquidation sales as part of the bankruptcy proceedings. Online sales have also stopped.
The Body Shop's UK arm collapsed in February, just months after a German private equity group, Aurelius, bought the group founded by the late environmental and human rights campaigner Anita Roddick. The deal was completed in January, and the UK business was put into administration less than six weeks later.
The administrators hired by The Body Shop International have announced plans to shut down 82 of the company's 198 total stores in the UK. These closings are expected to occur over the next five weeks.
Additionally, the company's German, Danish, Irish, and Belgian divisions are also facing insolvency, while uncertainties loom over operations in Spain, Sweden, France, and Austria. The Australian and New Zealand operations, consisting of nearly 100 stores, are also under threat.
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