Body Shop UK enters administration, putting jobs and shops at risk
Newsflash: The Body Shop has appoints administrators to run its business, and “accelerate” its restructuring.
Tony Wright, Geoff Rowley, and Alastair Massey of business advisory firm FRP have been appointed as Joint Administrators of The Body Shop’s UK business.
They will consider “all options” to find a way forward for the business, The Body Shop says, and will “update creditors and employees in due course”.
The Body Shop add:
The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand, relevant to customers and able to compete for the long term. Creating a more nimble and financially stable UK business, is an important step in achieving this.
The Joint Administrators will continue to trade the business in administration, ensuring customers will be able to continue to shop in store and online for their favourite products.
The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector. Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring.
The Body Shop said last night that they intended to appoint administrators.
The move comes just three months after private equity firm Aurelius bought The Body Shop for £207m.
The process is likely to cause dozens of shop closures, putting jobs at risk and threatening a crucial source of sales for a global network of small farmers and producers.
Key events
Full story: The Body Shop collapses into administration in UK
Rob Davies
The Body Shop has more than 200 UK stores.
Sources familiar with the situation said they expected the brand to survive in some form but with far fewer shops. It employs more than 2,000 people in the UK.
Body Shop UK enters administration, putting jobs and shops at risk
Newsflash: The Body Shop has appoints administrators to run its business, and “accelerate” its restructuring.
Tony Wright, Geoff Rowley, and Alastair Massey of business advisory firm FRP have been appointed as Joint Administrators of The Body Shop’s UK business.
They will consider “all options” to find a way forward for the business, The Body Shop says, and will “update creditors and employees in due course”.
The Body Shop add:
The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand, relevant to customers and able to compete for the long term. Creating a more nimble and financially stable UK business, is an important step in achieving this.
The Joint Administrators will continue to trade the business in administration, ensuring customers will be able to continue to shop in store and online for their favourite products.
The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector. Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring.
The Body Shop said last night that they intended to appoint administrators.
The move comes just three months after private equity firm Aurelius bought The Body Shop for £207m.
The process is likely to cause dozens of shop closures, putting jobs at risk and threatening a crucial source of sales for a global network of small farmers and producers.
Oil cartel Opec is sticking with its forecast for higher demand over the next two years.
In its latest monthly report, Opec forecasts global oil demand growth of 2.2m barrels per day in 2024, and 1.8m barrels per day in 2025.
Opec has also nudged up its estimates for world economic growth this year to 2.7%, up from 2.6%, and to 2.9% in 2025, from 2.8%.
The report says:
Global economic growth exceeded expectations in both 3Q23 and 4Q23, and the consistent momentum towards the end of the year is expected to carry over into 2024.
UK housing market has “turned the page” in January
The UK property market strengthened in January, new data from estate agent Hamptons shows.
Hamptons reports that there’s been a steep fall in the number of price reductions, while the pressure on sellers to accept offers below their asking price fell as houses sold faster than a year ago.
Here’s the details:
-
In January, sellers were less likely to cut their asking price than at any time over the last eight months. 48% of homes sold in January across England & Wales had been subject to a price reduction, down from a peak of 55% in October 2023.
-
The average seller in England & Wales sold their home last month for 98.9% of their asking price, up from 98.5% in both December 2023 and January 2023.
-
9% of homes that came onto the market in January sold within a week, up from 6% in January 2023… but lower than in January 2021 when 19% of homes sold within a week.
Aneisha Beveridge, head of research at Hamptons, said:
“The early signs in 2024 suggest that the market has firmly turned the page. Falling mortgage rates have been the primary catalyst, tempting last year’s missing movers to restart their property search. Consequently, more households were looking to buy last month than in any January over the last decade, including the start of both 2021 and 2022.
“First-time buyers and second steppers, who tend to be most reliant on mortgage finance, are at the forefront of the recovery. This injection of demand is starting to stabilise house price falls, particularly for mid to lower-priced homes, which should also improve selling conditions further up the chain as the year progresses. That said, the affordability picture is still more challenging than it was a few years ago which will keep a tight lid on price growth.”
Kevin Boscher, chief investment officer at investment group Ravenscroft, predicts the first UK interest rate cut will come in May – with up to one percentage point of cuts coming this year:
Whilst inflation surprises positively and hits its 2% target earlier than expected, we think the MPC will remain cautious given “sticky” services inflation, rising disposable incomes and wage inflation which is still on the high side although falling rapidly.
We expect the MPC to cut rates by 0.75%-1% this year starting in May.
Global investors are more optimistic that the world economy will avoid being driven into recession by high borrowing costs.
The latest poll of investors, from Bank of America, has found that 62% of respondents think the US economy will stay robust, surging up from 28% last month.
The proportion expecting an immediate US slowdown due to monetary tightening (high interest rates) has almost halved, falling from 61% to 32%.
Growth pessimism in Europe remains pronounced, however, with 62% expecting a weaker European economy given the drag from monetary tightening, down from 83% last month.
Troubled social housing investor Home REIT has told the City that it is being investigated by the Financial Conduct Authority.
The FCA has begun an investigation, covering the period from 22 September 2020 to 3 January 2023, Home REIT says, adding:
Naturally, the Company will cooperate fully with the FCA in its work.
Home REIT invests in the provision of sheltered housing for homeless people throughout the UK.
Last year it fell into crisis as tenants withheld rent due to problems with its properties, such as black mould and leaking ceilings.
It has also been targetted by short sellers, with one claiming its properties were overvalued and questioned its tenants’ ability to pay rent.
Home REIT’s shares have been suspended since the start of January 2023, after it missed the deadline to publish its annual report.
Some shareholders have claimed that Home REIT misled the market, and are bringing legal action against the company.
Oil hits two-week high
Fears that the Middle East crisis could push up inflation may deter the Bank of England from early interest rate cuts.
And policymakers will have noted that the oil price has hit its highest level in over two weeks this morning.
Brent crude has climbed by over 1%, to as high as $82.95 per barrel, the highest since 30 January.
Analysts at SP Angel Energy say:
Crude oil prices remain elevated as Israel’s military ramp-up strikes in Gaza targeting the southern city of Rafah, with the Houthis also continuing their attacks on vessels in the Red Sea.
The Bank of England will cut interest rates in June, predicts Kallum Pickering, senior economist at Berenberg bank.
Overall, he forecasts five quarter-point cuts this year, as pay growth continues to slow.
So far, the BoE has managed to pull off a mostly soft landing for the economy, while enabling a Goldilocks scenario for the labour market. But it is too soon to declare a complete victory.
Even though money market rates have fallen in anticipation of forthcoming rate cuts, past rate hikes are still feeding through the housing market and to businesses that are rolling over debt. To keep the labour market on track and to underpin a broader recovery in economic activity in 2024, the BoE will need to start to take its foot off the brake soon.
A likely further easing of wage growth over coming months should give BoE policymakers the confidence to start cutting rates from Q2 onwards. We continue to look for the first 25bp cut in June and five cuts overall in 2024 – lowering the bank rate from 5.25% to 4% by year-end.
