Nearly 400 more jobs are at stake as cosmetics retailers struggle to pay suppliers in Australia after the failure of UK parents.
Nearly 400 more jobs are at stake as cosmetics retailers struggle to pay suppliers in Australia after the failure of UK parents.

The Body Shop faces bankruptcy in US and Canada

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Nearly 400 more jobs are at stake as cosmetics retailers struggle to pay suppliers in Australia after the failure of UK parents.

Financial Struggles Extend Beyond UK

The Body Shop, known for its ethical cosmetics, faces significant financial challenges beyond its UK operations, as its US and Canada branches file for bankruptcy, and its Australian arm grapples with mounting debts.

US Bankruptcy Filing

In the US, The Body Shop has ceased trading at its 50 outlets and filed for Chapter 7 insolvency, jeopardizing approximately 400 jobs and putting millions of dollars’ worth of stock at risk.

Impact in Canada

In Canada, 33 out of 105 shops have closed, resulting in the loss of over 200 jobs, indicating the extent of the company’s struggles across North America.

Australian Business Under Pressure

The situation in Australia is particularly dire, with nearly 100 stores operating in the country and additional locations in New Zealand. The future of the chain hangs in the balance as it grapples with significant debts and dwindling access to funds.

Also read: United Airlines plane runs off runway in Houston

Debt Woes and Supplier Issues

Despite profitability, The Body Shop’s Australian business struggles to cover debts owed to suppliers, including logistics firms and marketing agencies. 

The company faces challenges in securing additional funds to address these financial obligations, especially after the collapse of its UK parent company.

Cash Pooling Complications

The collapse of The Body Shop’s UK arm has had ripple effects on its global operations, including a practice known as “cash pooling” where funds from profitable overseas businesses were centralized in the UK. 

With access to these funds now cut off, debts incurred during peak trading seasons remain unpaid, further exacerbating financial woes.

Uncertain Future

The challenges faced by The Body Shop highlight the complexities of managing a multinational business during financial turmoil. 

As the company navigates bankruptcy proceedings in North America and grapples with debt in Australia, the future remains uncertain for employees, suppliers, and stakeholders alike.

Jean Martin

Jean Martin, a seasoned Correspondent Author at USA Guardian Magazine, specializes in transforming complex subjects into engaging narratives. With a keen eye for detail and a commitment to truth, her work spans politics, culture, and technology, enriching the magazine's diverse content. Jean's reporting not only informs but also inspires readers, showcasing her belief in journalism's power to drive change.

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