As another big name collapses – is the…

As another big name collapses – is the High Street as we know it doomed?

FIRST it was Woolworths. Once a giant of the High Street, known for its star-studded Christmas TV adverts, the department store chain collapsed in 2008.

Experts said it wouldn’t be the last. In the 16 years since, other big names have hit trouble, including Debenhams, Jessops and most recently Wilko. Now it is the turn of The Body Shop.

The retailer, which runs more than 200 shops across the UK, has appointed insolvency experts from FRP Advisory to oversee the administration process.

FRP said the administrators will “consider all options to find a way forward for the business” after years of financial struggles and amid a challenging backdrop for shoppers.

The chain will continue to trade through stores and online during the administration process.

Administrators stressed that the process will only affect its UK business, with international franchises not impacted.

FRP said: “The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand, relevant to customers and able to compete for the long term.

“Creating a more nimble and financially stable UK business is an important step in achieving this.

“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.”

The retailer was founded in 1976 by Anita Roddick and her husband Gordon as one of the first companies to promote so-called ethical consumerism, focusing on ethically produced cosmetics and skincare products.

It comes only weeks after new owners, European private equity firm Aurelius, took control of the business.

Aurelius, which specialises in buying and turning around troubled firms, secured a £207 million deal in November to buy The Body Shop from Brazilian cosmetics giant Natura & Co.

It only took control of operations officially on January 1. The business employed around 10,000 people worldwide at the time of the takeover.

Aurelius agreed a deal late last month to sell the company’s operations in most of mainland Europe and in parts of Asia to an international family office in a “decisive step towards delivering a strong turnaround strategy” at The Body Shop.

So is the end nigh for the High Street? The pandemic and online shopping are two challenges which have made life difficult for traditional bricks-and-mortar retailers.

Centre for Cities, the leading think tank dedicated to improving the economies of the UK’s largest cities and towns, says: “The pandemic undeniably accelerated an existing shift: internet shopping peaked during lockdowns, and stabilised or fell in most places, but never quite back to 2019 levels- a sign of stickiness of behaviours as people became more acquainted with online shopping.

But this doesn’t necessarily mean online shopping is killing high streets and city centres.

Centres for Cities goes on: “Evidence shows that more online shopping does not necessarily mean more empty shops, as what really matters is the affluence of the local economy.

“And not all the extra spending that is made online affect the typical high street retailers: groceries, for instance, account for a large part of the shift online, while the hospitality industry is much more sheltered. Our analysis suggests there will be life for UK high streets in the future, but many will have to adapt the nature of their offer.”

There’s one other factor that could help save the High Street. We all love a bit of retail therapy. Until the pandemic ‘shopping’ in its various forms was the UK’s number one leisure activity.

Online transactions may have changed some of that thinking, but a day out with friends taking in the shops, enjoying a coffee and grabbing a bite to eat remains a compelling offer. 

So doom-laden predictions of the end of retailing as we know it are almost certainly wide of the mark.

As Andrew Carter, Chief Executive of Centre for Cities puts it: “Good jobs and a strong local economy are the keys to saving high streets. Any interventions that seek to improve cities’ amenities without boosting consumer spending power are doomed to fail from an economic perspective.” 

As the think tank says: “Successful high streets will strike the right balance between different types of use. The performance of the high street cannot be approached in isolation from other functions city centres should serve, in particular as places of work. The role of local policymakers is to create the right conditions for businesses to locate, by ensuring the right provision of high-quality office space alongside other types of commercial uses.

“Successful high streets will also offer what we cannot find at home or online, by moving away from over reliance on retail towards the ‘experience’ leisure economy.”