from stealing an idea to worldwide success and from being sold to a giant to going bankrupt

This week, British cosmetics manufacturer and retailer The Body Shop announced the closure of all of its US stores. The once innovative and prosperous company has already filed for bankruptcy in the States, Canada, Britain and many European countries. It turned out that the brand, based on the activism and moral principles of Anita Roddick, was unable to live without her.

Green shop

On March 27, 1976, a small cosmetics store, The Body Shop, opened in the north of Brighton, England. Its owner, Anita Roddick, decided to attract customers by placing advertisements in local newspapers stating that her store sold only cosmetics made from natural ingredients that were not tested on animals. The latter is an unprecedented innovation for the body care and cosmetics industry. And people came.

Behind the green facade, a meager assortment awaited visitors. There are 15 titles in total. The store was simply not ready for the initial influx of customers, although there were not hundreds, but only dozens of people. Roddick had to purchase plastic test bottles from a nearby hospital to package the product. And in order not to go broke at first, she turned the shortage of packaging into a fashionable concept – reusable packaging for the sake of preserving nature.

Despite popular belief that Roddick is a pioneer in the field of ethical cosmetology, she didn’t actually come up with anything. She simply stole the idea and even the name of the store.

The same The Body Shop opened in the American city of Berkeley, California, back in 1970. Anita, then still working at the UN, saw him during one of her trips abroad. Even the advertising brochures for her The Body Shop were an exact copy of the advertising brochures of the American original.

But while promoting ethics in the creation of cosmetics, Anita herself in those years had no time for ethical reflection. Her husband then left for the USA, and she had to feed herself and her two daughters on her own.

Less than a year later, Anita opened a second store. Just at this time, Anita’s husband, Gordon, returned. He became a co-owner of the business. He advised his wife to expand the business: the products were clearly in demand. And what could be better for the fastest business expansion than franchising?

By 1984, the chain had 138 stores, about half of which were outside the UK. The vast majority are franchises.

Finally, in 1984, The Body Shop reached an important milestone in the history of any company – going public. At the time the company entered the London Stock Exchange, its shares were worth £0.95. Eight years later, The Body Shop shares rose 10,944%.

Idea for millions

But the story of The Body Shop is not just about a successful business project. This is a real symbol of the era. First of all, the era of change.

The concept of the store coincided with the life credo of Anita Roddick herself. She was an environmental activist, an ardent opponent of animal cruelty, and a supporter of healthy feminism, believing that women should not look like models from the covers of glossy magazines, as cosmetic corporations want. The main thing, she believed, was to be in harmony with yourself and your body. And cosmetics are just a way to enjoy yourself.

“Beauty is the outer expression of everything you like about yourself,” Anita said.

Roddick became an idol for women: the head of an international corporation at a time when women were not willingly allowed into the world of business, let alone leadership positions. And the girls didn’t just dream of buying something at The Body Shop. They dreamed of working there.

“The competition was fierce,” remembers one of thousands of British girls in the 1980s who dreamed of working at The Body Shop. “Everyone wanted to work in such a cool, fashionable store, and the group interview at the local five-star hotel was akin to a beauty pageant.”

And since 1986, The Body Shop has also become one of the brightest representatives of corporate activism. Then Anita Roddick’s company, together with environmentalists, held an action against whaling. She suggested to her competitors in the market to use jojoba oil instead of whale oil. Then she will carry out dozens more campaigns – in defense of nature, against the imposition of stereotypes of beauty for women, or to combat the sexual slavery of women.

In 1987, The Body Shop launched its Trade, Not Help program. The company sourced exotic natural ingredients from developing countries and indigenous peoples. For example, blue corn among the Pueblo Indians in New Mexico and Brazil nut oil among the Kayapo Indians in the Amazon.

In Glasgow, The Body Shop soap factory allocated 25% of its profits to the city budget – and this is after taxes. This is how she supported the city, which was going through hard times. The Harlem retail store donated 50% of its profits to local activist groups. And in 1991, the company helped launch the weekly The Big Issue, which became one of the largest social projects in London.

Dashing 90s

The Body Shop’s business model, however, raised concerns among experts: the company was growing too quickly. It’s one thing to open a store, but quite another to keep it profitable. Roddick had problems with this in the mid-90s.

The problem was not the network’s most aggressive policy, but that competitors began to fill this niche.

The first two major competitors appeared in 1990. Estee Lauder introduced Origins, a line of products with natural ingredients packaged in containers made from recycled materials. And Billionaire Leslie Wexner’s The Limited launched the Bath & Body Works chain, which within a year and a half had nearly 100 points of sale. The chain used similar colors to The Body Shop, which confused customers.

In 1994, Procter & Gamble entered the market by purchasing the German company Ellen Betrix with its Essentials line. In the same year, L’Oreal entered the fight for lovers of natural cosmetics, releasing its Planet Ushuaia line. Like Bath & Body Works, L’Oreal copied The Body Shop’s vibrant packaging colors and emphasized exotic ingredients.

The first scandals were added to the problem of increased competition. In 1993, the company was attacked by the British TV show Body Search, which accused it of using ingredients tested on animals. The Body Shop filed a lawsuit and won the case, receiving £276 thousand in damages to the company’s reputation.

And in the summer of 1994, the US Federal Trade Commission began its investigation against The Body Shop. The company was accused of deceiving investors due to inflated estimates of aid to developing countries, as well as environmental pollution.

The Body Shop’s financial performance began to deteriorate. Throughout the second half of the 1990s, Roddick tried to get the business in order, cutting costs and restructuring the company. In 1998, the company got a new CEO – Patrick Gournay. The Roddikov couple became co-chairmen of the board.

But all the efforts made by the Roddicks to revive the once prosperous empire were unsuccessful. And in 2001, the first rumors about its possible sale appeared. In 2002, Anita and Gordon Roddick resigned as co-chairs of the board. It became obvious that the network decided to look elsewhere for salvation.

Briton in a French house

Everyone knew that The Body Shop was looking for a buyer. But the final choice caused surprise and even indignation. In March 2006, the company announced that it would be sold to L’Oreal. The same one that Anita struggled with from the very beginning. Fans of the British chain did not understand how a fighter for ethical cosmetics ended up in the hands of a company that did not deny animal testing.

L’Oreal paid a modest £652 million for The Body Shop. The Roddicks personally earned £130 million from this sale.

Anita Roddick was accused of betraying her ideals. She assured that The Body Shop would remain true to its principles and would be a “Trojan horse” that would force the corporation to change for the better, acting from within.

Anita herself was not destined to see this. Back in 2004, she was diagnosed with cirrhosis of the liver due to chronic hepatitis C. She hid her diagnosis until 2007, when it became impossible to do so. On September 10 of the same year, Anita died.

As for her brainchild, the miracle for which she so hoped did not happen. This deal looked strange from the very beginning. By that time, L’Oreal already had cosmetic brands – Kiehl’s, Lancome and Garnier, which were much larger and more successful. And this is not counting the perfumes of Ralph Lauren and Giorgio Armani. In this company, The Body Shop was a mere outsider, chronically neglected.

In an era when retail chains were massively switching to online trading formats, L’Oreal management planned a massive expansion of sales points for The Body Shop. It was planned to open another 3 thousand stores around the world, expanding the geography of presence to 40 new countries. The plans were not implemented.

By 2016, The Body Shop generated revenues of £750 million, compared to €25.8 billion for L’Oreal. Operating margin fell below 4% versus 20% for the holding’s core consumer business. The French giant decided that there was no point in pulling out the British network. And I decided to sell it.

Death from a cold

In June 2017, L’Oreal announced the sale of The Body Shop to the Brazilian company Natura Cosmeticos. The parties did not disclose details of the deal. According to unofficial data, the seller valued the British network at €1 billion.

At first it seemed that Natura would be able to stabilize the position of the British company. The network’s revenue began to grow.

But then the COVID-19 pandemic hit, a death sentence for The Body Shop, a company that had until now relied primarily on its 3,000 locations around the world.

And they were closed literally overnight due to coronavirus restrictions.

The Body Shop’s revenues have halved. Management tried to save the company by cutting costs as much as possible. But by the fall of 2023, the Brazilians surrendered.

The Body Shop was bought by the German investment fund Aurelius for £207 million. In mid-February 2024, the fund announced that it would not be able to revive the business. At the same time, it became known that the parent company, registered in the UK, was placed under external management. At the end of February, it was announced that the chain would close 82 of its 198 stores in Britain.

Then regional divisions fell down the chain. The Body Shop has been declared insolvent in Germany, Denmark, Ireland and Belgium. And this week it became known that the company is closing all of its stores in the United States and a third of its locations in Canada. In both cases, the company filed for bankruptcy. Aurelius will now seek to sell off its remaining assets in order to pay off The Body Shop’s debts as much as possible.

Kirill Sarkhanyants