The Body Shop – What went wrong?

Sarah Montano, Professor of Retail Marketing, explores what went wrong with the Body Shop, and how such an iconic British high street brand went bust.

23 February 2024•4 min read

Interior of a Body Shop store. — Image credit: The Body Shop.

With the latest news that The Body Shop has gone into administration and 40 stores are to close, we examine just what has gone wrong for The Body Shop, what this means for the British High Street and what can beauty brands learn from this latest retail collapse?

What went wrong?

With the beauty industry being worth £8.94 billion per year in the UK, it would seem that there is room for all brands however, in such a significant market there is retail failure. Not only is the beauty market so significant but even at a time where many are concerned with the cost of living, the beauty market has been increasing year on year with a 5.4% increase in 2022.

When The Body Shop was launched in 1976 by the late Dame Anita Roddick, it was a revolution on the High Street, quite simply there was not another beauty brand that was campaigning and offering natural products in the same way. Anita Roddick believed that retail could be a force for good and make a positive impact on society. In the 1970’s environmental issues were more of a niche concern rather than at the forefront of public consciousness as they are today. The Body Shop brought awareness of key issues such as Rainforest depletion, animal testing and fairtrade. For many, The Body Shop brings back great memories of being a teenager and spending endless hours looking for White Musk perfume and a bath pearl!

But since 1976 there have been several key changes that have affected The Body Shop’s positioning:

Firstly, a number of competitor brands have also adopted the same environmental or natural values, for example brands such as Evolve, Ren or Neal’s Yard, meaning that The Body Shop no longer offers a distinctive product.
Secondly, campaigns against issues like animal testing in the beauty industry are no longer needed nor a main focus for the public, as in 1998 there was a ban on animal testing for finished cosmetics and ingredients. Although environmental concerns are just as important as ever.
Thirdly, price - some customers felt that The Body Shop prices had become too high, and the products were no longer good value.
Finally, the repeated sales of the company. The Body Shop was initially sold in 2006 to the L’Oréal Group, and for some customers who held The Body Shop values close to their hearts, knowing that their money would go to an MNC (Multi-National Co-corporation) would be at odds with their own principles and the very reasons they shopped there in the first place. There have been two subsequent sales to Natura and Co in 2017 and AURELIUS Group in 2023.

What does this mean for the British high street?

This latest collapse just illustrates the difficult climate for all retailers, it has only been a few months since the collapse of Wilko, so with yet another brand disappearing, this will leave visible gaps and empty units on the High Street. If we lose our High Streets, it will be difficult to get them back, so the onus is on councils and Government alike to attract retailers to fill empty units.

What can beauty brands learn?

A true fact of retail is that customers change, trends change and there are always new competitors trying to take your shoppers. Today the beauty market is dominated by female entrepreneurs, following the path that Anita Roddick paved for them, and a lot of the beauty market is dominated by brands that are functional but deliver results.

For example:

Huda Beauty founded by Huda Kattan and her two sisters Mona and Alya and Cult Beauty co-founded by Alexia Inge and Jessica DeLuca. Huda Beauty’s philosophy is to create products that fill a gap in the market, and they want every product to serve a purpose.
Cult Beauty was started precisely because the founders believed that so much money was being wasted on poor quality products, so they set out to find ‘cult’ products that really worked to help the beauty customer shop efficiently.
Sephora, a brand mourned by many when it left Britain in 2005, has recently re-entered the UK market. Go into any Sephora at the weekend and you will see how busy it is particularly with young women and teenagers who are keen to try its exciting offerings at all price points. Sephora aims to curate emerging brands and much-loved classics into one space.

As well as this, many celebrities have developed their own beauty brands with dedicated fan followings, such as Rare Beauty (Selena Gomez), Fenty Beauty (Rihanna) and Rose Inc (Rosie Huntington-Whiteley). For the beauty industry today, it is not just about a campaign but product effectiveness and retail excitement.

In conclusion, whilst we will always mourn the loss of a familiar High Street brand, retail will always change. Retailers need to be focussed on future customer needs and be agile and adapt or before too long we will be back exploring the demise of yet another brand. However, there is hope! As retail continues to evolve gaps in the market appear, and as we can see from the current successful beauty brands, if you have an innovative brand, customers will want to spend.

Featured staff

Professor Sarah Montano
Professor of Retail Marketing
Sarah Montano is a Senior Lecturer in Marketing at Birmingham Business School, University of Birmingham, UK.
Email: s.e.montano@bham.ac.uk