The Body Shop has announced that it will be closing one-third of its Canadian stores. They will also be ending online sales as the company files for creditor protection.
According to a court filing, the company, which is based in the U.K., owes over $3 million to unsecured creditors, on top of another $16,000 to secured creditors.
In total, they will be shutting down 33 stores across Canada, including those in Ottawa, Toronto, Calgary, Saint John, Edmonton, and Saskatoon, all of which will begin liquidation sales immediately. It’s currently unknown how many employees will be losing their jobs,
In a press release, The Body Shop said it will be re-evaluating its strategic alternatives during this time.
As the company restructures, they will no longer be taking gift cards, nor will they be selling new gift cards. All purchases will also be final, according to Jordan Searlem, the company’s North American president, as they will no longer be able to provide customers with refunds,
Just last month, The Body Shop was acquired by a private equity firm; this has allowed the company to restructure without having to pay its debts to creditors.
At the time, however, the company stated that their Canadian stores would not be affected by the change.
Online Store Will Also Close
The Body Shop has also announced that they will be closing their online store in Canada, a decision that has shocked many individuals including the founder of Retail Insider, Craig Patterson.
Patterson believes it will be detrimental to the company as customers who will no longer be able to shop at physical locations will not be able to shop online either,
He also noted that several of The Body Shop’s competitors including Lush, have a significant online presence across Canada, in addition to numerous physical stores,
The cosmetics company, which was founded back in the late ’70s, was known for its cruelty-free products, which set it apart from its competitors. However, it became harder and harder for them to differentiate themselves as more and more brands began to offer similar alternatives.
Lianne Foti, a business associate professor at the University of Guelph, said they’ve seen a significant increase over the past several years in companies and brands that offer the sane values in the skincare and beauty market, which has made The Body Shop’s offerings more common in the market.
