London:

The Body Shop, a nearly 50-year-old cosmetics company known for its ethical hair and skin care products, is close to bankruptcy in the UK due to poor Christmas sales, according to media reports.

Sky News reported on Sunday that German private equity firm Aurelius, which bought The Body Shop only last November, was arranging administration, a British process in which financial experts are drafted in to try to save parts of the business.

It is said this will lead to store closures and job losses at The Body Shop. The company was founded by Anita Roddick in 1976 but has been owned by multiple owners since selling it to French cosmetics giant L’Oréal in 2006.

The Body Shop has about 200 stores in the UK, accounting for about 7% of its global total of about 3,000 stores in more than 70 countries.

The company employs approximately 10,000 people directly and an additional 12,000 through franchising.

The Body Shop and Aurelius have yet to comment on the weekend news.

Since taking over, Aurelius has sold The Body Shop’s operations in much of continental Europe and parts of Asia to an unnamed buyer.

Susannah Streeter, head of currencies and markets at Hargreaves Lansdown, said: “Administration means the company will be protected from compulsory liquidation and provide legal protection from creditor claims.”

“This will give Aurelius breathing room to restructure and close severely underperforming stores and refocus attention on e-commerce sales. Regardless of the outcome, it appears that many stores will close for good.”

Roddick, who died of a brain haemorrhage in 2007, quickly expanded the business from the start, determined to offer products that were not tested on animals.

She is also working to make her business more environmentally friendly, encouraging customers to return empty containers for refills at the original store in Brighton, on England’s south coast.

Brazil’s Natura Cosmeticos, which bought The Body Shop from L’Oréal, sold it to Aurelius late last year for £207m, well below what the previous owners paid.

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