Aurelius boss makes abrupt exit after takeover of The Body Shop

A DEALMAKER who helped to spearhead the private equity takeover of The Body Shop left abruptly as the retailer collapsed just three months later.

Aurelius, the German buyout specialist – where Peter Wood had held the position of managing director – is facing criticism over the £207m deal, which saw it become top creditor to The Body Shop before its insolvency.

The chain is now being run by administrators from FRP and bracing for a wave of store closures and job losses.

It is understood that after completing its acquisition in January, Aurelius discovered The Body Shop’s finances were in a much worse state than expected, sparking urgent discussions over what went wrong during the company’s due diligence process.

At the time of the deal’s announcement three months ago, Mr Wood, who joined Aurelius in January 2018, said on social media that he was excited “to bring the company back to its former glory”.

This came after the company said in November that it wanted to “re-energise the business” and “drive operational improvements”.

A person close to Aurelius said: “The business was found to be in a much worse financial position than it expected it to be. The deal was completed on Jan 1. Within a couple of weeks, they knew it was in a very different situation.”

However, questions have been raised over the nature of Aurelius’ cut-price takeover, as more than 2,000 jobs are at risk.

Aurelius is facing questions over an alleged failure to make payments worth £3m to a group of around 20 former employees in January, reportedly part of the agreement struck with The Body Shop’s former owners Natura.

It is understood that Aurelius invested less than £20m of equity in the deal, as Natura sold the business at a significant reduction compared with the £870m it paid in 2017. A senior retail source with knowledge of The Body Shop said the failed payments to former staff represent the “unacceptable face of capitalism, the very extreme end of private equity”.

A person close to Aurelius rejected the claims and said the payments would be treated like any other financial obligation by the administrator. Aurelius

is understood to be in pole position to reclaim The Body Shop’s assets if no bidder materialises. The firm’s status as top creditor means it holds sway over the business’s future if it is not sold.

The retailer’s UK stores will remain open while administrators at FRP attempt to restructure the business and products will continue to be sold online.

In a statement last week, the administrators said: “The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector.

“Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring.”

Founded in Brighton in 1976 by Anita Roddick, an environmental activist, The Body Shop was credited for bringing ethical beauty to a mainstream audience.However, the retailer has struggled with flagging sales and competition from rivals on the high street such as Lush and Rituals in the UK.

Its most recent accounts show that The Body Shop posted a loss of £71m in 2022, down from a £10m profit.

Aurelius declined to comment. Mr Wood, who resigned from Aurelius, was contacted for comment.