EP205. What happened to The Body Shop?

The news that has rocked the beauty industry in recent months is that the Body Shop, one of the OG beauty brands that championed ethical consumerism before anyone else really embraced it, has sadly gone into administration and is likely closing many stores around the world and other parts of its business. Now, understandably, this has got people asking all sorts of questions, but I think the main one on everyone's lips is what on earth happened? So that's the question we're going to try and answer in today's podcast episode. And to help answer it, I'm joined by a brilliant beauty retail expert who is highly respected in the industry and has also been on this podcast with me before. I am of course talking about Wiz Selvie and together we're going to try and get to the bottom of what happened and how other beauty retailers can potentially avoid a similar fate. Buckle up because this is going to be a fascinating episode. Welcome to Green Beauty Conversations, the podcast that challenges you to think about how you buy, use, make or sell your green beauty formulation. In my weekly episodes I explore the sustainability of the beauty industry and encourage you to join me in changing the beauty industry for the better. I'm your host, Lorraine Dalnaya. I'm a chartered environmentalist, biologist and the CEO of award winning online organic cosmetic formulation school Formula Botanica. We have tens of thousands of students in over 190 countries around the world who study with us to become organic beauty formulators and entrepreneurs. Visit our website@formulabotanica.com to try our free online formulation course. And if you want to be the first person to know what's happening in green beauty, make sure you subscribe to this podcast in your favorite podcast app. So in today's episode I'm joined by Wiz Selvie, thought leader and the go to industry name for market insights and advice in the retail industry. Voted by Rethink Retail as one of the top retail influencers, Wiz previously headed up beauty buying at Selfridges and is now the founder of Wiz Co, a strategy agency specializing in retail, consumer trends and brand building. Wiz is an international speaker and a regular contributor to industry and mainstream press. Her varied experience means she's in the unique position to have worked with thousands of brands and understands the market like no other. Put simply, Wiz knows what works and is passionate about helping businesses combine innovation, creativity and commerciality to get results. Hi Wiz, how are you doing today?

Really good, thank you.

I am so pleased that you're back on the podcast. It's been it's been about four years since you were on last time, so this is going to be a brilliant topic. So welcome back.

Thank you. I'm really excited about this subject, so it'll be great.

Well, let's talk about what happened before we dissect it. What's going on with the body shop at the moment?

Yeah, I mean, so it's had turbulent times for many years, really. It was acquired by l', Oreal, gosh, quite a number of years ago, and I feel like the l' Oreal Group didn't integrate it into the rest of their business, which sometimes happens, sometimes doesn't. But, yeah, I don't think they quite knew what to do with it. And, yeah, that must have been probably 10 years ago now. And then it was sold to another group, the Natura Group, again was in a great portfolio of brands alongside kind of Aesop and Avon. Then it was again sold very recently, before Christmas, to another group, Aurelius. And very quickly they've announced it going into administration. There's been lots of change. There's been quite an uproar, I suppose, from industry people. There's been a lot of upset from people that work there about what's going on, but ultimately it's not driving the sales. It's not a profitable business, so it's not working. So I suppose it's been crunch time with the announcement around administration.

Yeah, it's certainly rocked the beauty industry. Just for our listeners, what does going into administration actually mean?

It's tearing the business apart, really. It's pulling it apart, seeing what's working and what's not. And if there are any assets that could be saved or could be worth money, then potentially they can be sold on. So a lot of people are talking about this is the end of the body shop, but I don't think it's the end of the body shop. I think it's the end of the body shop as we know it, up and down the high street, trying to reinvent itself in that format. But that's not working and that's not a profitable market going into administration. What I hope, and I'm optimistic about, is what will come back in a different guise. The brand name could be sold, for example. We've seen that in the last few years. A lot of other retailers that are kind of going under, they. They come back in a different format under a different ownership, and it's not the same business model that the customer knows at that time, but there is still longevity in that brand name because this. It's Usually recognised, yeah.

Gosh. I suppose the question on everyone's lips is what. What led them here? Because the Body Shop is such an iconic brand and although not entirely natural, I suppose in reality it was really one of the first brands that embraced that sort of ethical, natural movement. So how did this go so wrong? Do you think the sales contributed to it?

Yeah, it's a number of factors and I suppose it's the work that I've done over many years from I've been working in buying at Selfridges and spotting the latest trends. What makes a brand suddenly rise up and then what makes it fall? And then when I work with a lot of brands on a different stage of their business is that positioning piece. And that could be a new brand trying to infiltrate the market or an established brand and how do they reposition? But ultimately there's two key factors with the success of a brand and it's what's happening in the market, what are the consumer trends, what are people looking for? And the second one is, I suppose, the timing around that's the right time of what the consumer wants to buy. Sometimes brands can come in and it's too early, it's too innovative and then it kind of rides the wave later on. But I think what's happened with the Body Shop is we've seen, obviously they started to the trend. Well, it's not really a trend. I don't like calling it a trend. It's a movement really of what consumers want and I suppose their demand are kind of around more sustainable, more natural. Obviously they kind of started the name animal testing. So, I mean, that was a real movement in. Back in the day when. When Anita Roddick kind of started that and it was really kind of shook up what was happening in the industry. She was that thought leader and made all the other brands look to. But what we've seen in the last, I suppose, 10 to 15 years is that movement has become mainstream, which is exciting, super exciting. But so many other brands have got on board with that and unless you continue to innovate, you're going to get left behind, which quite often you see when a brand is bought by a big corporate group, that some of that innovation, some of that spark from the founder or obviously Anita was sadly no longer around when l' Oreal first bought it. But again, some of that spark of that founder or that creativity that might be leading a brand at the top was lost at that point and no one's been able to reignite that, which has been why I think it's got lost along the way.

I feel quite sad almost for Anita Roddick's legacy in a way because obviously she started the Body Shop to embrace ethical consumerism. It was a really big thing, very innovative in its time. I read this quote recently from Millie Kendall, the head of the British Beauty Council and she said that she felt the Body Shop was missing an activist. Do you think that having. Which I suppose ties in with exactly what you've just been saying as well. So do you think having that sort of activism could have maybe saved them?

Yeah, I think if they'd had somebody really strong at the helm that was visible, that was an activist in this space. But a new iteration of what activist activism means within ethical brands. Absolutely. I think it could have been, yeah, really, really helped it. But that creativity was behind the scenes. I think the other aspect as well is in this day and age, consumers really know who owns brands. And there are so many founder brands on one hand, there's so many founder led brands out there which people relate to and then there's so many brands that are bought by big corporations where you can look on a website from l' Oreal or Estee Lauder or Unilever and you can see who owns what brand, whereas before it's quite hard to find out 20 years ago. So yeah, customers, if they are ethically minded as well, they. It kind of is a bit jarring sometimes for a lot of them to be able to speak with, to purchase from a brand, from a corporate, they would rather then be like, okay, well that's been bought by a corporate. What's the next new brand that I'm going to go and buy that I'm kind of feel like I'm giving back because they have more ethical values or I want to support a founder led brand and a person because I relate to them and their values and their ethics.

Well, tying in with that founder led brand concept, do you think it's really possible for companies to easily lead a business when they they didn't start it, when so much value perhaps sits in the ethics and the values of that founder? So recently we've seen similar stories of for instance, Greg Renfrew, CEO at beautycounter, having to step back into that CEO role after she sold it to the Carlyle Group for I think it was about US$1 billion, which is an insane amount. Or I read an article about Vicky Tsai, the founder of Tatcha, who sold her business to Unilever for half a billion and then also had to step back into that CEO role because I think they were struggling. Now, how hard is it really to make a brand a success when its new shareholders maybe don't have that same brand DNA that made the company a success in the first place?

It's a real balance really, because by selling a company that becomes huge scale opportunities with the infrastructure that these big corporates have. But I think it's really important to try and keep that, some of that, that founder relationship in there. And you've seen it from other brands, like real legacy brands like Dermalogica, that was around for so many years, was bought by Unilever. And it was very much, I suppose Jane wasn't really at the forefront for a really long time with Dermalogica. And it feels like in the last five years she's really come back to the forefront again. Again in kind of those same examples that it's really important. I mean, that's why we've seen the rise of influencers, because originally influencers were people that looked like you, that you could relate to because they had similar. Yeah, skin texture, skin color, hair. Yeah. Size values, interests, had an everyday job. So you could kind of relate to them rather than this kind of celebrity or this big founder, which is now gone full circle again because now celebrity influences are the celebrities. But again it's how you make brands relatable. And ultimately that's a really quick way to grow business because you want to create that emotive connection. And that's why we're seeing the rise of things like micro influencers, user generated content, where it's the real customers talking about the products. That can be a really fast way to grow a business. It's very powerful. So yeah, we are humans at the end of the day, we, we buy emotionally most of the time.

Yeah. Let's tie in a little bit with what you were saying earlier about innovation. So for instance, some retailers such as Lush, they're constantly investing in reinventing their retail experience and we see it in the shops and how you now go to have an experience in the shop rather than just buy a product. For instance. Do you feel that the body shop was investing in that same sort of innovation?

It didn't come to the forefront. I think they were trying, but actually that kind of link with the customer, it just wasn't there. I think there was a lot of core ranges which were successful, but there didn't seem much innovation that they were really shouting about or customers were picking up on. Really. I think that's the key thing really is that When a brand starts to go viral or there's that kind of hype around a brand, it means that everyone's talking about it and that's the things that can't necessarily be tracked or measured, like digital advertising. It's suddenly a friend saying to Fred, have you seen this? This is a really cool product. Go and buy this. Everyone's posting about it on social media and that just hasn't happened with the Body Shop compared to somewhere, somewhere like Lush probably need to take some big risks and some bold decisions to be able to do that. And that didn't happen quickly enough.

No. Well, on the flip side, do you think maybe that customers even felt as if their message was maybe coming across as a little bit dated in the current climate? So maybe walking into a shop feels like you're going back to the 90s almost. And I read one article that said if nostalgia were a smell, it would be the Body Shop's Jewberry. And one other article I read quoted an esthetician who said, we grew up with the Body Shop, but it didn't grow up with us. So what does that perhaps tell us about that? Need to innovate.

Yeah. And I mean really interesting because nostalgia, nostalgia is massive at the moment. Like I feel, I mean, there's pros and cons. I'm like, oh my goodness, all these 18 year olds are wearing everything I wore when I was 18 and it's making me feel really old. On the other hand, I'm going out and listening to music in a bar and I'm like, oh, this is great. This is the song they were playing when I was out when I was 18. So that's great from that point of view. But yeah, I was like, well, nostalgia with a smell of the dewberry or White Mask. You're like, this is brilliant, but doesn't make me go buy it. I don't want to smell like I did when I was 12. Actually, I've matured, so I think everyone loves it in their heart. But are they actually going to buy anything from there? No. So it hasn't grown up with everyone. It's, it's bad memories. But it's not that. Memories aren't enough. You've got to want the product.

I read one article from someone who suggested that maybe the Body Shop could start selling nostalgia beauty boxes. Nostalgia boxes. I mean, I don't know who could that even work?

I mean, it's, it's a flash in the pan. I don't think it's going to change their fortunes at all, not a chance. It's not enough. It'd be something fun. Someone buys if it's 10 quid and give it to their friend for fun. But it's not going to change the fortunes.

No, fair enough. Well, let's talk a little bit more about their sort of embrace of ethical consumerism. Because obviously this was a big thing for Anita Roddick when she first started the Body Shop. And in recent years, the Body Shop had even introduced refilling schemes and stations into their stores. I saw one, I went in, I quizzed the person there, she told me all about it. It still seemed like a lot of effort because I still had to bring everything back and then refill it in the store. Do you think they were approaching the spirit of their DNA and that sustainability that they really wanted to achieve in a way that appealed to shoppers?

Yeah, I think. I mean, again, that was one small element, but everyone's trying to do refills, but actually don't think people have quite cracked it yet. And to your point, if it's a hassle, there's a barrier to customer purchase. You have to break down every single barrier there is. And it's getting harder and harder to do that. We live in a world of Amazon, where we can do one click and it's delivered sometimes the same day. Everyone is so busy, so stressed, so overwhelmed with everything that's going on. If there's any clunkiness or difficulty, it's just not going to happen. People haven't got the capacity to be able to do that as much as they want to do it. So refilling station is great, but I think it's likely probably not getting used very much. I've. There's other stores that have them and I don't really see them being used very much. So I think refilling, where you can post a refill, you can order it online and it's a more sustainable option to refill your own bottle is a great way to do it because it's easy for the customer to choose that if they're repeat purchasing, it needs to be. Needs to be more than that. That's just an element of it. And it goes back to your comments of activism. It's not. We're not active, we're not some big statement or some big movement. It's that they're firing on all cylinders for. It's a couple of little things.

It needs to be bigger than that. Yeah, I get it. The other thing they've closed is their body shop at home. Arm which is where you have these armies of consultants.

Maybe army isn't the right word but it feels a little bit like it sometimes.

Where they'd have parties at home to sell body shop products. And some people of course have called this a pyramid scheme, a multi level marketing scheme and they're certainly not the only ones who've implemented it because there are many brands out there who have done this and some of them very successfully. Do you think this really helped their brand? Do you think it perhaps contributed to their downfall?

I think it was an interesting thing to try and it was. I can see why because it was a time when they were owned by the Natura Group who also owned Avon. Who are the still Avon are still the number one rep based selling model but this is still a tiny part of the overall revenue for the, the beauty. I mean most of it still comes through retail and then second to that E commerce. So yeah, I think it's interesting something to try but then again you're probably getting the customer that's that nostalgic customer rather than trying to gain a new customer and innovate for a younger audience. And I suppose there's, there's two thought camps on who is your customer because it's great to go back to that existing customer because they've now grown up, they've got very high spending power. That kind of 40 plus women is really I suppose under marketed to and they've got the spending power and I think it's certainly a frustration amongst that age group. But all brands seem to be focusing on getting that younger consumer and actually I'm not sure that younger consumer is shopping in that way at all. They're shopping through their friends and links and TikTok and social media or actually going back into store. The queues in Sephora and Space NK are wild. So people still like that physical shopping and that exploration. I think the brands that they're buying are through social media but they're still going into the shops to have that experience and get that bag. So I think it was something interesting for them to try and I could see what they did. Again, I don't think it would have been the complete downfall of their business. I just think it's that customer engagement where people not top of mind there isn't the product innovation, the purpose has got lost. It needs a new spark. Shops are expensive on the high street so some of them were probably working but the amount that they had probably made a lot of them unprofitable.

Absolutely. We need to keep up with the skintellectual of today. And that, as you say, does involve TikTok online. It's, it's a different way of selling. So do you think what happened to the body shop then tells us something about the current climate in the beauty industry? Do you think we could see more heritage brands suffer a similar fate?

I think there could be more on the cards for sure. It's, I think with any recession it's a shake up, new brands come in and suddenly boom a lot of other brands. We see a big decline because so much going on and suddenly costs have increased a lot for a lot of brands. And whether that's the cost of digital advertising, supply chain, it's the cost of the actual goods. Staffing challenges, certainly in stores are challenging as well. And recruitment, so there's been the rates of stores, so there's been a huge amount of change in overheads as well. But actually if you're not profitable enough, suddenly you're going to go into decline. So things need to be looked at quite quickly. So there must be some sparks in there. Otherwise, I mean there would have been due diligence done on acquiring a company. So there must be some things in there that were working. So to be able to announce administration they need to make sure that they don't lose money on their acquisitions. So it will be about pulling that apart quite quickly and I suppose training through Christmas to see whether actually it was those stores or some of the stores or which ones it was a great time to see because generally that is a peak trading time for many brands. We will see a future for the brand but just in a different guise.

Yeah, it's interesting, you know, I'm told by lots of people all the time, oh, the beauty industry is so very saturated, I can't break into it. And then you see a story like this where you can see a heritage brand not innovate and potentially lead to its own downfall by not keeping up with trends, by not keeping up with what the market wants and all of a sudden creating a gap in the market for someone else to come and fill. So it just goes to show if you can really tap into what people want at that particular time, you can definitely make that a success. Which I think is an interesting message for everyone listening who wants to start their own beauty brand. So what do you think is next on the horizon for the body Shop? Because they still have some of their international interests. I believe some articles have mooted the idea of them moving online only would that still retain the heart of the brand? I don't know. What do you think is going to happen next?

There might be something like where the, the brand name gets sold. I mean we saw it last year with kind of Paperchase and Hunter. It's kind of gone in under, under another company. They've kept the brand because it's very recognisable and kind of almost kept it as its own label. And you see, see brands that this was done years ago with something like Habitat, which everyone knows and loves and is now sold in Sainsbury's and Argos because it's kind of all under the same business and the same umbrella and you still think, oh yeah, cool, that's Habitat. All buy that. That's real value to the customer and it's a higher tier brand than potentially a Sainsbury's own label homeware brand. And it's got higher quality. So it could certainly go in under a different, a multi brand retailer that kind of has it as its own brand. I saw that Next were looking at it and they've obviously been picking up a lot of brands recently in lots of different product categories and they do this a lot in fashion. So we've seen that happen over the last few years. They've done it with Bath and Body brand from America as well. So that could be something that's on the horizon for them. They also have a lot of big format shops where they can have smaller format concession type stores inside. So I think that could be quite interesting for a company like Next to acquire it. They've also got a very strong online business as well. So they have their own channels to be able to kind of pump that through as well as their own product development teams to be able to kind of evolve the brand through those channels. Which makes it cost effective really because a lot of the infrastructure and a lot of the costs around team warehousing, pick and pack, delivery store rents, all of those things that are a challenge for the brand as it is at the moment will suddenly all of those costs will reduce and then suddenly the business could become profitable. So there could be a future in that. So yeah, I think it will. We evolve into a format like that in a different way. So I definitely don't think it's the end. Obviously it's a challenge going through a structure like this for the team and the people that work there. There will be a future for it, I think.

I hope so. I hope that Anita Roddick's legacy lives on. She was an incredible entrepreneur, an incredible woman, incredible pioneer and I think it would be a real shame if all that work that her life's work that she put into this is let down through perhaps not having the right person at the helm after her no longer being with us. So I really hope that it does live on Wiz. Thank you so much for coming on the podcast today. It's been lovely chatting to you again. Where can people learn more about you and your work?

Yeah, I mean come and follow me online. I do a lot on LinkedIn. My name is Wiz Delvey Instagram. My business is Wiz and co. Check me out online as well. I have a lot of free content there about how to build a beauty brand, how to get more standout in the industry, how to scale through your commercial channels, retailers, your e commerce channels, how to build the hype for your brand, for your marketing. So come and check me out and let me know what you think of this podcast and what your thoughts are.

Brilliant. We'll include all of those links for the show notes. It's lovely to have you back on the podcast again. Thank you so much for joining me. See you soon.

See you soon.

I would love to hear your thoughts on this episode. What do you think the Body Shop should have done differently? How do you feel that the Body Shop can keep Anita Roddick's legacy alive? Leave us a comment on our social channels as both the Formula Botanica team and I love hearing from you. And if you want to hear more about some of the topics we covered, please do delve back into the podcast archives. So some great Examples include episode 52 all the way back in 2020 when I interviewed Wiz for the first time on what an indie PC brand actually is. So go back and listen to Wiz dropping lots of great content in that episode Too, or episode 111 in which I interviewed Mia Davis, who used to work at Credo Beauty. And in that episode we discussed how beauty retailers should approach sustainability and beauty samples and Mia gave a fascinating insight into the work that Credo is doing. There's a wealth of information in our old episodes and I do encourage you to go back and listen to them. Thank you for joining Wiz and I for this latest episode of Green Beauty Conversations. I really hope you enjoyed it and if you did, please do leave us a five star review so that other people can enjoy these conversations too. Make sure you subscribe to the podcast on Apple Podcasts or Spotify or whatever your favorite podcast app is and stay tuned for the next episode. Follow Formula Botanica Formula Botanica on Facebook, Instagram, YouTube, TikTok Twitter or LinkedIn and come and give me a follow at Lorraine Dalmayer on Instagram. Visit our website@formulabotanica.com and sign up for our free online formulation course today.