Body Shop suppliers left with 1 million dollars of unsold ingredients

As The Body Shop enters administration, its fair trade suppliers in Africa and the Amazon are grappling with the aftermath. Many find themselves burdened with significant stockpiles of ingredients, facing uncertainty about the prospect of selling them should stores be shuttered.

Data unveiled by The Guardian indicates that several suppliers, lacking formal contracts, have amassed hundreds of thousands of dollars worth of stock. The Body Shop has initiated administration filings in the UK and Germany, with Belgium reportedly poised for a similar fate.

While most community projects indirectly serve The Body Shop, supplying ingredients to intermediaries or the group's various cosmetics manufacturers, concerns loom over payment in the event of a business collapse. Candela Peru, a South American retailer, disclosed holding 0.5 million dollars worth of oil inventory for The Body Shop, illustrating the potential financial impact on long-term suppliers operating without formal contracts.

Where did it all go wrong?

Once renowned for pioneering natural ingredients and cruelty-free beauty, The Body Shop faced challenges as a new wave of clean and ethical beauty brands gained prominence. Some attribute the brand's decline to L'Oréal's 2006 acquisition, stating that the beauty giant, a stalwart in managing brands, struggled with the intricacies of retail operations. Others said The Body Shop's lost its soul.

Aurelius, the private equity firm that acquired The Body Shop for 207 million pounds in November, is now its third owner, excluding founder Dame Anita Roddick, who began the business in the UK in the 1070s.

Aurelius reportedly encountered unexpectedly dire financial conditions during due diligence after completing the acquisition in January. The Body Shop’s finances were in a much worse state than expected, according to Yahoo, sparking urgent discussions over what went wrong during the company’s due diligence process.