Once a trailblazer for ethical retailing, The Body Shop recently entered into administration, with more than 40% of its stores in the UK set to close, parts of its international business sold off, and several of its European operations winding up.
Private-equity firm Aurelius acquired The Body Shop from Natura & Co in a deal worth £207 million (€240 million) last November – the Brazilian firm having acquired it from L’Oréal in 2017.
Also, it’s just a few months since The Body Shop was named the UK’s most sustainable retailer, according to Impact’s Great Green Sustainability Study, taking the top spot for 2023 ahead of M&S Home and Waitrose.
So what happened?
Beginning of the end
According to Ecovia Intelligence, which has done a thorough investigation into the reasons behind The Body Shop’s decline, the beginning of the end came when the company’s founder, the late Dame Anita Roddick, sold the business to L’Oréal in 2006.
As the research and consulting firm notes, it hasn’t been a case of the ethical brand ‘losing its way’ – rather it ‘stood still’.
‘The Body Shop was indeed a trailblazer with many of its green initiatives in the 1980s and 1990s,’ Ecovia Intelligence states, adding that the business was among the pioneers in actively campaigning against animal-testing methods, while also leading the way in introducing refillable packaging and sourcing natural ingredients.
‘However, the beauty industry has moved on since then. Sustainability is now an integral part of the industry, with cosmetic brands all undertaking some green / ethical initiatives. In short, being ethical was no longer good enough.
‘Competition has played an important role. The Body Shop initially offered shoppers an array of natural cosmetics, made from raw materials sourced from the far corners of the world. Natural cosmetics are now well-established, with major high street retailers like Boots and Superdrug also marketing these products under their private labels.
‘Competition has also come from rival brands. Lush, another cosmetics retail chain, has taken ethical cosmetics to new levels with its green campaigns and innovative natural products. The UK brand is a pioneer with packaging-free products, selling solid shampoos and naked mascara. About a third of its cosmetic products are sold without packaging. It operates almost 900 Lush stores in 50 countries; some new store openings are ‘naked’ i.e. all cosmetic products have no packaging. One can argue that Lush took the ethical baton from The Body Shop shortly after its formation in 1995.’
Consumer preferences
As Ecovia Intelligence puts it, another factor has been changing consumer preferences, with The Body Shop’s formerly ‘unique shopping experience’, including natural products, essential oils, and ethical gift packs, entering the mainstream.
‘Ethical consumers no longer look at just natural ingredients, but also consider packaging impacts, carbon footprint, social causes, and related green issues when making purchases,’ it noted. ‘There are questions on whether younger consumers, especially Millennials and Gen Y, resonate with the Body Shop brand.
‘To conclude, the demise of The Body Shop highlights how competitive stakes are rising in the sustainable cosmetics arena. Once a trailblazer, the iconic brand appears to have been left behind as consumer preferences have changed.’
To learn more about how to improve sustainability in your business, make sure you read www.sustainabilityonline.net.
