The Body Shop is preparing to appoint administrators for its UK branch

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The Body Shop’s new European private equity owners are set to call in administrators for its UK operations just weeks after the retailer changed hands in a £207m deal.

Aurelius, which also owns sportswear chain Footasylum and pharmacy Lloyds Pharmacy, bought the cosmetics brand from Brazilian firm Natura & Co in November and took over its operations earlier this year.

The retailer, which has around 200 stores in Britain, is set to appoint administrators from FRP Advisory, a move that could lead to closures and job losses, a person familiar with Aurelius’ thinking said. The move was first reported by Sky News.

Receivers may seek to secure lower rents in a bid to reduce the company’s day-to-day costs, the person said.

The private equity firm concluded that the company did not have sufficient working capital and was performing weaker than expected, the person added, and intended to move quickly to put it on firmer financial footing.

Diane Wehrle, CEO of Rendle Intelligence and Insights, said any potential store closures would be “a huge blow to the UK’s high streets”.

“The focus in the future is likely to be more on online, which will be better suited to what is now clearly a disparate customer base,” he added.

The administration process for UK operations is not expected to impact the brand’s global franchise partners.

Aurelius, which has offices across Europe, specializes in buying and reviving unwanted assets from companies or businesses facing operational difficulties.

Last month it confirmed it had signed a deal with “an international family office to sell its business in most of continental Europe and parts of Asia” taking a “decisive step towards realizing a strong turnaround strategy ”.

The confirmation came weeks after Aurelius said it would seek to improve the performance of a company that had struggled under previous ownership and had to contend with other companies that were catching up with its once-unique ethical message. Natura paid €1 billion to acquire the business from L’Oréal in 2017.

Founded in 1976 by the late Anita Roddick and her husband Gordon, The Body Shop was among the first companies to promote the so-called ethical consumerism that argued that business could be a force for good.

“The Body Shop is a business that many of us grew up with,” Tristan Nagler, a partner at Aurelius, told the Financial Times in November. “There is an opportunity to get it back on its feet and bring it back to its former glory.”

Aurelius, The Body Shop and FRP declined to comment.

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