The Body Shop Canada will close nearly a third of its stores and end online sales as it seeks creditor protection, the Canadian subsidiary of the U.K. beauty and cosmetics shop announced Friday.
A court filing showed the company owes more than $3.3 million to unsecured creditors and about $16,400 to secured creditors.
The company did not say how many workers would lose their jobs as a result of the store closures in cities including Toronto, Ottawa, Edmonton, Calgary, Saskatoon and Saint John.
The company said in a press release it hopes Ontario court proceedings will give it “breathing room” while it evaluates its strategic alternatives and engages in restructuring.
As part of that restructuring, the company will no longer accept gift cards, sell new gift cards or provide refunds, and will consider all new and previous purchases final, said Body Shop North America president Jordan Searle in a memo sent to Canadian staff on Friday and obtained by The Canadian Press.
The move comes after The Body Shop International was acquired by a private equity firm and put into administration last month, allowing it to restructure or wind down without paying off its debts.
At that time, the company told CBC News that its Canadian stores would not be impacted by the change.
CBC News has reached out to a spokesperson for more information.
Closure of online store a ‘surprise,’ says retail expert
While the writing was on the wall for the company’s Canadian stores after the U.K. branch filed for administration, the closure of its online store comes as a surprise, said Craig Patterson, the founder and publisher of Retail Insider.
“It does, honestly, very much surprise me that that type of move would be made in a Canadian market,” he said.
Consumers who no longer have access to a brick-and-mortar store but who may still want to shop at The Body Shop would have done so online, he said.
He noted that some of the company’s competitors, such as the popular U.K. retailer Lush Cosmetics, have an online presence in Canada. Lush also operates brick-and-mortar stores across the country.
“Just not having that web presence, I think, is going to be detrimental to the company in Canada,” said Patterson.
The company, which was founded in 1976, took on an environmentally friendly ethos to distinguish itself in the cosmetics retail world, touting its cruelty-free approach to testing.
Lianne Foti, associate professor at the Gordon S. Lang School of Business and Economics at the University of Guelph, says that over the years, it became harder for The Body Shop to differentiate itself in the market as more competitors started offering ethical and sustainable alternatives.
“The ethical beauty and skincare market, they’ve really seen significant increase in brands that promote similar values,” Foti said in an interview with CBC News. “So what was once a unique selling proposition for The Body Shop is now a common claim among many brands.”
List of stores closing
The Body Shop Canada’s 105 stores across the country are still open for business, the company said. The Body Shop U.S. has also ceased operations, according to the release.
The 33 locations that are closing, listed below, will immediately start liquidation sales.
Ontario
Bayview Village (Toronto); Rideau Centre (Ottawa); Carlingwood Mall (Ottawa); Cataraqui Town Centre (Kingston); Lynden Park Mall (Brantford); Stone Road Mall (Guelph); Dufferin Mall (Toronto); The Shops at Don Mills (Toronto); Fairview Park Mall (Kitchener); Timmins Square (Timmins); Queen Street East (Toronto); Toronto Pearson Terminal 1 (Toronto); Lambton Mall (Sarnia); Place d’Orleans (Ottawa); Lansdowne Place (Peterborough)
Alberta
Sunridge Mall (Calgary); Londonderry Mall (Edmonton); Lloyd Mall (Lloydminster); Medicine Hat Mall (Medicine Hat); Park Place (Lethbridge)
Saskatchewan
Cornwall Centre (Regina); Lawson Heights (Saskatoon); The Centre (Saskatoon); Midtown Plaza (Saskatoon)
British Columbia
Semiahmoo (White Rock); Hillside Shopping Centre (Victoria); Village Green (Vernon)
New Brunswick
McAllister Place (Saint John); Champlain Place (Dieppe)
Nova Scotia
Mayflower Mall (Sydney); Truro Mall (Truro)
Manitoba
Shoppers Mall (Brandon)
Newfoundland and Labrador
Corner Brook Plaza (Corner Brook)