The former boss of Molton Brown is set to take charge of The Body Shop in a rescue deal that will keep 133 branches open.
Administrators at FRP said they had sold The Body Shop to a consortium led by cosmetics tycoon Mike Jatania after weeks of exclusive talks with the entrepreneur.
Charles Denton, the former Molton Brown chief, will become chief executive.
The move is expected to save more than 1,000 jobs, with Mr Jatania’s investment company Aurea understood to have no immediate plans to close any more stores. The Body Shop currently employs 1,300 people.
The new owners may look at finding better locations for current shops in various towns and cities, sources suggested.
UK commercial leases are 21, maybe 25 or 30 year things. With 3 or 5 year rent reviews. Rent reviews are upwards only.
Now, if commercial retail gets into trouble – Hello Online Shopping! – the system is hugely inflexible. Extant shops can’t negotiate their rents down. New market entrants can gain very much lower rents. Incumbents are therefore prey to new comers.
The way out is bankruptcy, administration or there’s a third similar thing. At which point you get to tell the landlords to go pound sand. And negotiate your rents down. Also, be free of thsoe 20 odd year commitments to specific leases.
Which is, I insist, what the Body Shop admin/bkruptcy/whatever it was was all about. Being able to screw the landlords. Perfectly viable business in there, storied brand name and all that. But got to get the cost base – the rents, rightsized. Commercial leases whose rent reviews could be up or down would have made it unnecessary.
Note, this may not be 100% oand only this be true. But I guarantee you it’s a lorra ‘f it.