Taxpayers will be forced to pay millions of pounds to sacked staff at The Body Shop as administrators oversee a drastic restructuring of the collapsed chain.
Well, OK, that’s what the law is. But what’s the real thing they’re trying to shed here?
It’s not, not really, the debt load. Because:
The Body Shop’s administration will increase scrutiny on Aurelius, which bought the retailer from Natura for £207m just three months earlier.
Aurelius emerged as the retailer’s top creditor before its insolvency and is understood to be in pole position to reclaim The Body Shop’s assets, shorn of debt, if no bidder materialises.
Well, yes, but it’s shorn of debt to itself – that’s what being the leading creditor means.
Yes, some of it will be owed to other people but unless Aurelius are preferred creditors they have to lose the same %ge as the other creditors. So, not really and not quite “shed the debt” perhaps.
As well as putting the future of hundreds of jobs at risk, the collapse has also left a swathe of the chain’s landlords bracing for closures.
Aaaaah….
He said: “The business will be significantly leaner and more profitable as debts are shed, stores are closed and property costs are renegotiated downwards.”
British commercial leases. Typical – only typical – 21 year terms, 3 year rent reviews, upwards only rent reviews. The only way out is administration (there’s a halfway stage which I can’t recall the name of but that requires the landlords to play nice). And commercial, retail, property prices have dropped, massively, these past couple of years.
At which point it might indeed be worthwhile taking the hit on that directly owned debt, plus that £20 million of equity they put in (which is, obviously, gone) in order to get back a business which has its retail rents cut by what, 50%? 70%? Could be that much.
The process slices out great gobbong chunks of their costs base. Huzzah!
Now, whether that was the original plan, or this is second best cobbled together since seeing the books in detail, who knows?
This would also be too strong a statement but I’ll make it anyway for there’s definitely a truth here. Which is that Body Shop going bust in Britain is really caused by upwards only rent reviews. Going bust is the only way out of them.
And our bansturbatory government doesn’t officially allow other related retail uses for their High St shops. We’re a service economy for crying out loud.
The imposition of ever-stricter parking restrictions in town centres should never be under-estimated both here and in the inevitable trend initially towards megastores and retail estates and eventually to Amazon and other online entities.
The high street is already dead. Bring on even more “Turkish” barbers, nail bars, charity shops, pound shops, tattoo parlours, cash-only fried chicken shops, polski skleps (plus their recently emerging Bulgarian cousins) and coffee outlets. Have I missed anything?
Wouldn’t you need to be crazy to open a high street shop under such terms? In fact isn’t the high street fuct for a whole mob of reasons? There’s no single fix.
It’s surprising that the Govt hasn’t lit upon the bright idea of transforming “the High Street” into residential accommodation for
illegal immigrantsour new brothers in Christ.Railway stations would also be excellent for such
conversionschanges of use because increased rents and sharply reduced footfall have resulted in lots of empty retail space. Think how nice for ladies travelling alone to feel they were being watched over.And Vape shops.
I knew there was another one!
Not only ever-stricter parking restrictions, visiting my home town I’ve found they’ve done everything they can to ban *BUSES* from the city centre.
Have I missed anything?
BEEG EESHOO?
HELLO! I AM YOUR FRIEND! BEEG EESHOO?
Thanks, Conservatives.
TMB
Here on the South Coast the conversions from retail to resi have already started on the peripheries . Only a trickle so far but just you wait and they’ll be in the town centre, each one as many studios a.k.a. bedsits as they can cram in.
Julie Burchill wrote a good piece on the Body Shop losing its way from Anita Roddick’s original goals and going woke.
It doesn’t matter how low you can drive the rents, if nobody wants to buy your stuff you ain’t coming back.
https://www.spectator.co.uk/article/the-welcome-demise-of-the-smug-shop/
………because that’s where the real money is. Even without using the ground floor an enterprising landlord/developer can fit two studios on each of the three upper floors above a standard retail unit. With councils, maybe also the likes of Serco, falling over themselves to pay a minimum of £1k per month per room that means £72k p.a. gross guaranteed income plus whatever they can squeeze out of the ground floor (why not another barber?) and maybe even a basement.
Compare that to what you’d get for a regular “retail shop plus storage and living accommodation above”.
This locally. Cotswold District Council don’t understand that parking is about rationing of available spaces, not revenue raising.
https://www.wiltsglosstandard.co.uk/news/24132425.ghost-town-fears-cirencester-parking-fee-rise/
Weird, even Swindon figured this out, but Cirencester voted for Lib Dems.
Sadly, that’s actually a really bad Burchill piece.
Sure, it’s reasonably competent, has some nice snark in it. But could have been done by pretty much anyone. Burchill’s – on a good day – vastly better than that. And Burchill should be held to the standards of Burchill on a good day.
That is, mildly snarky and perfectly competent is, by Burchill standards, terrible.
It’s like watching Usain Bolt come second in the county meet 100m final and saying “Oh, Well Done!”
“Weird, even Swindon figured this out, but Cirencester voted for Lib Dems.”
No Swindon hasn’t, its had 24hr parking fees 7 days a week for 20 years.
With councils, maybe also the likes of Serco, falling over themselves to pay a minimum of £1k per month per room
Wow! I should evict my tenants from the two 2-bed flats above my shop, and get some council scum in! Hmmm 2 x 2-bed flat = six rooms + shared space, two people per room….. I’m sure I could get a bed into the laundry room.
Swindon, hold my beer:
“Leopold Street is lovely and quiet now“.
This is what used to be the main bus route through town, nay, even *BUILT* as a public transport artery in the 1890s. You can see all the bus stops. A great bit of pre-WW1 municipal town planning when they knew what they were doing. “Nice and quiet”? Yeah, nice and *dead*. The nearest you can get to the city centre by bus now is a 20 minute walk away up a steep hill.
You probably wouldn’t come up the standards required for HMO’s, jgh. Can’t have the little swarthy darlings subsisting without a jacuzzi, can we? And be prepared to replace all interior woodwork when they leave. You can’t barbecue goat without a decent fire.
Right but the new owners won’t be the only creditor. And there is likely limited interest from suppliers in having 260,000 pots of body shop branded calendula and lemongrass fourth left toe serum back.
Not saying it happened, but why not lend a company you own lots of money (becoming its biggest creditor), have it buy “consultancy services” or some other nebulous crap like rebranding that costs nothing to supply, for, entirely coincidentally, the same amount of money, and then push it into insolvency because it can’t even earn enough to pay the interest on the loan you made to it? All for the sole purpose of ending those no longer wanted contracts, and getting a bit of stock from suppliers who can’t be arsed.
Not to mention you get to write off the bad debt. That could be worth it on its own if you have enough other profitable investments.
I assume there is some kind of law against it, but is it enforced?
Well it did occur to me there maybe other costs to be saved after I watched Greg Wallace hand make a bath bomb in the body shop factory recently. (note to fbi crawlers – look it up bismillah)
Currently it’s against the law for two consenting adults to agree to exchange labour for money at an hourly price between £0.01p and £10.41p.
Heck – i’d consent to work for a Churchill an hour if it meant average time serving customers of 20 minutes an hour, a drink and sandwich, and 40 minutes reading while just being present and access to pron.
Nice set up in Brackley where a couple of till dudes mind several dozen independent antique sellers all at once. Could be copiable. But it’s similar to a supermarket where a few till staff mind a warehouse of stuff for sale.
Jeez jgh, I read that Sheffield thing with breathless amazement.
Post-pandemic Sheffield should be the capital of experiences. Cliffhanger, Fright Night, even the continental food market, they’re all reasons to go into the city centre which aren’t just about shopping.
Shopping is what cities are for. It’s what pays for them. It’s the entire reason for them existing. Commerce. He’s right about it being quiet. Couple of similar dossers looking at the town hall. Betjemin was definitely wrong about “friendly bombs”. Beginners stuff. There’s nothing more devastating than “environmentally sensitive town planning”.
A local place has aggressively managed their parking bylaws to effectively ensure the very nice small beach can’t be accessed by people outside the town easily, they are even trying to move a bus stop to discourage that option