The Body Shop has filed for bankruptcy in the US and Canada and is struggling to pay suppliers in Australia as the group’s most profitable overseas businesses struggle with cash shortages after its UK parent’s collapse last month.

The US arm of the ethical cosmetics group has ceased trading at its 50 outlets. On Saturday, it filed for Chapter 7 insolvency, under which assets are sold off to clear debts, putting about 400 jobs at risk including those in a distribution centre that still holds millions of dollars-worth of stock.

In Canada, 33 of the 105 shops have closed, with the loss of more than 200 jobs.

In Australia, where the group operates almost 100 stores and is responsible for more than 20 more in New Zealand, it is understood that the future of the chain is hanging in the balance as it struggles to cover large debts after its access to funds was cut off.

Sources said the profitable business could cover its day-to-day expenses from cashflow but would need additional funds to cover debts to suppliers such as logistics firms, warehouses and marketing agencies for services during its busy Christmas season.

The Body Shop’s UK arm collapsed in February, only months after a German private equity group, Aurelius, bought the group founded by the late environmental and human rights campaigner Anita Roddick. The deal was completed in January and the UK business was put into administration less than six weeks later.

Sources said that money earned by the key overseas businesses during the peak trading period in November and December was paid into a global account, based in the UK, in a practice termed “cash pooling”. However, funds in the account are now not available to cover debts to suppliers used during that period as access was cut off when the UK parent company called in the accounting firm FRP Advisory as administrators.

It is understood that the North American and Australasian businesses are now counted as creditors to the UK arm and may have to wait months for any payment via FRP.

A spokesperson for FRP said: “The cash pooling ceased upon The Body Shop International entering into administration with funds then remaining with each subsidiary entity.”

It is understood that the Australian business has unsustainable levels of debt which will require new funding.

Since the UK business collapsed, FRP has announced the closure of more than 80 of the ethical beauty retailer’s 198 UK stores while more than 300 jobs have been cut from its head office.

Aurelius is the top creditor of the UK business and, as it controls the brand rights, is in pole position to reclaim The Body Shop from administrators. Other potentially interested parties are thought to include Next, as well as the HMV owner Doug Putman.

The Body Shop’s divisions in Germany, Denmark, Ireland and Belgium have all been put into insolvency, with stores outside Germany closed, after being sold by Aurelius to Alma24. The company is controlled by Friedrich Trautwein, a close associate of Aurelius who has previously helped to shut down unwanted businesses.

The future of The Body Shop’s operations in Spain, Sweden, France and Austria is unclear amid wrangling over ownership.

Filings in Canada reveal that the Body Shop there owed $3.3m (£1.9m) to landlords, logistics, providers, marketing agencies, insurers, utilities and freight service providers when it entered insolvency on 1 March. The company said it no longer had access to its e-commerce platform or the ability to ship to wholesale partners including Amazon or to receive new stocks because of difficulties in paying suppliers.

The problems come as it emerges that Aurelius has so far paid less than £100m of the headline £207m price for The Body Shop.

Only part of the agreed £117m initial purchase price has been so far handed over to the group’s former owner Natura, with the rest due over the coming five years. A further £90m is due only if certain performance criteria are met over that period, and so may never be paid.

Administrators are understood to be investigating a claim that more than £10m was extracted from The Body Shop’s UK arm in December by Natura. The money is understood to linked to debts owed by its former subsidiary which sources said had been laid out in the sale agreement between Natura and Aurelius.

By Sarah Butler

Learn more:

When Sol de Janeiro Rules Supreme, Is There Room for The Body Shop?

The beauty label has fallen under administration with plans to cut staff and stores. How did the ultimate purveyor of uber-perfumed creams and fragrances and purpose-driven brand messages, which seem so relevant now, fall so far?

When the nominees and other assorted A-listers stride down the (thankfully, once again) red carpet at the Oscars on Sunday, many, if not most looks will be the product of careful negotiations between brands, agents, stylists and stars, with millions of dollars changing hands.

This is no secret, of course. Red carpet dressing has been big business going back to the 1990s. But it has swallowed up an ever-greater share of luxury brands’ marketing budgets in recent years. That’s partly down to the brands themselves getting bigger, which means they have more to spend, but also need more and more attention on their celebrity ambassadors to meaningfully move the sales needle. The decline of print and television advertising has also narrowed the options for where to stage a big moment (former BoF correspondent Lauren Sherman has an excellent rundown of how this all works on Puck’s The Town podcast).

Believe it or not, there is, in fact, a limit to how big the red carpet can get before the costs start to outweigh the benefits. And it’s possible we’ll look back on this year’s awards season as the moment we hit that threshold.

The most obvious reason is that, Miu Miu aside, most luxury brands aren’t growing sales by 80 percent annually anymore. The beancounters hold more sway when a label is no longer printing cash, and an obvious money pit like celebrity dressing is one place to cut costs.

Some caveats: we’re mostly talking about spending caps rather than a dramatic pullback, as after two-plus decades, few brands can afford not to play the game anymore. Any cuts apply mainly to lesser events rather than the Oscars, which is second only to the Met Gala in terms of media impact. The biggest brands, such as Chanel and Dior, aren’t hurting for cash, and having the biggest actors locked down is a key way they maintain their lead. Red carpet dressing is also integral to labels like Versace and Armani.

But for small and mid-sized brands, and struggling larger labels, some strategic adjustments may be necessary. Fortunately, there are ways to play the red carpet game without a Chanel-sized budget. Loewe has run neck-and-neck with the likes of Prada and Louis Vuitton in terms of social media buzz at some pre-Oscar events, according to data from TribeDynamics. The brand has focused its efforts on up-and-coming actresses like Greta Lee, social media favourites like Aubrey Plaza (whose Emmys dress featuring a giant pin made the rounds on Instagram) and tabloid fixtures like Taylor Russell (the Canadian actress, who is dating Harry Styles, wore a backless Loewe dress to the BAFTAs).

Menswear is another budget-friendly option. It’s rare for a man to crack the list of most-talked-about looks on social, according to a Launchmetrics analysis of this year’s awards shows (Pedro Pascal being the exception that proved the rule, several times over). But Off-White, fresh off the Super Bowl, scored a minor hit with its powder-pink tux for “The Color Purple” nominee Colman Domingo at the Screen Actors Guild Awards. Burberry’s big pre-Oscar announcement was that it’s signed Barry Keoghan as an ambassador; the “Saltburn” star isn’t nominated for anything, but is widely seen as a next big thing in Hollywood, and has been getting plenty of attention for his unconventional red carpet looks this year.

If you’re looking for real proof the red carpet economy has maxed out though, look no further than this column, or the many like it you’ll find in competing publications. As any mob wife or coastal grandma will tell you, nothing says a trend has peaked like saturation media coverage.

Robert Williams contributed to this article.

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Background:

This fashion month was all about looking ahead. At several major brands, newly-appointed creative directors ushered in a new era, including Seán McGirr at Alexander McQueen, Adrian Appiolaza at Moschino and Chemena Kamali at Chloé. But beyond the creative director premieres, recurring motifs of technology and the pared down everyday reflected the current state of the world — and what’s to come.

“Early on, I detected this rather peculiar strain of sci-fi,” says Tim Blanks, BoF’s editor-at-large. “There is that incipient sense of apocalypse lurking and I think if you step back and take a really long view of what was happening, you could feel that kind of anxiety,” says Tim Blanks, BoF’s editor-at-large.

Following the conclusion of the Autumn/Winter 2024 shows, Blanks sits down with BoF founder and editor-in-chief Imran Amed to discuss the highlights of fashion month.

Key Insights:

• At Louis Vuitton, Phillippe Parreno’s immersive set design and Nicolas Ghesquière’s futuristic garments left lasting impressions. “There was a lot of white and a lot of reflection, a lot of shiny stuff. They could have been heading off to a space station. And the sound was insane. The sound makes you want to go home and open a nightclub in your living room,” says Blanks.
• Undercover’s Jun Takahashi featured a poem about a single mother raising her eight year old child, written by German filmmaker and playwright Wim Wenders. “Every detail is just so beautiful and evocative and then Jun Takahashi showed the collection to go with that; everyday clothes, but completely transmogrified by his insane ingenuity,” recalls Blanks.
• At Alexander McQueen, Seán McGirr’s first show displayed his energetic direction for the house following Sarah Burton’s departure. “I think that as a creative director debuting at a house, it’s much harder to create new energy than it is to create merchandisable clothes. And I think that’s what he succeeded in doing; he created a new energy around that brand,” says Amed.
• Following the sudden passing of David Renne, Moschino welcomed new creative director Adrian Appiolaza, who looked to the roots of the brand for his first show. “If you detail Franco Moschino’s iconography, Adrian Appiolaza went down the list and ticked every box. I think that that was probably the most joyful show of the whole season. … I think he celebrated the work of [Franco Moschino], in such a way that I’m really looking forward to seeing what he does next,” says Blanks.
• At Chloé, Chemena Kamali’s charisma shone through on the runway. “You could see her really embodying the new Chloé and being that kind of ambassador for Chloé in a way that maybe some of the more recent creative directors never were really able to do,” says Amed.

Additional resources: