Body Shop to be bought out of administration

(Sharecast News) - A consortium backed by British tycoon Mike Jatania has agreed to buy The Body Shop International out of administration, it was announced on Wednesday.

While no financial details were released, administrator FRP confirmed it had entered into an exclusivity agreement with a consortium led by Aurea Group, Jatania's investment firm, and due diligence was now underway.

It added that the management team would be led by Charles Denton, the former chief executive of beauty brand Molton Brown.

"While the deal is not yet complete, we believe the combined experience of the consortium, together with the existing management team, represents the best outcome for creditors and will ultimately ensure the long-term success of The Body Shop," FRP said.

Ethical beauty and skincare retailer Body Shop collapsed into administration in February, just weeks after it was acquired by private equity firm Aurelius in a £207m deal.

At the time, it blamed financial challenges under past owners as well as a difficult trading environment.

FRP initially said it would look to restructure the business, axing jobs and closing a swathe of stores. It now operates out of around 110 shops.

But in May an auction was launched after FRP conceded an alternative restructuring was not viable.

The Jatania family co-founded beauty business Lornamead in the 1970s, which owned brands including Lypsyl, Woods of Windsor and Yardley.

The business was sold in 2013 for over £155m.

Body Shop, which was founded in Brighton by Anita Roddick in 1976, was one of the first companies to actively promote ethically-sourced products and cruelty-free make up.

FRP said the sale was like to complete "in the coming weeks".