The Body Shop buyer paid just £3.5m for collapsed chain

The private equity buyer of The Body Shop paid just £3.5m upfront for the retail chain before its collapse, The Telegraph can reveal.

Despite agreeing to a £207m deal for The Body Shop in November last year, it is understood Aurelius has only handed over a small sum of cash to the company’s former owners, Natura.

Natura’s shortfall stems largely from a £90m performance-based payment that Aurelius was expected to pay over five years. That sum is now unlikely to be paid to Natura given Aurelius put The Body Shop into administration in February.

This has fuelled questions over how much Natura will receive from Aurelius beyond the £3.5m it paid upfront.

The prospect of steep losses for Natura will inflame tensions further between the parties, as the seller previously criticised Aurelius for failing to pay millions of pounds to former employees.

Natura said last month that it was “surprised and concerned” by Aurelius rowing back on a pledge to make payments to around 30 former employees.

The £207m sale price was the enterprise value of the business, which included things such as debts taken on by Aurelius through the takeover. As such, the private equity buyer was not obliged to pay that sum in full to Natura.

However, the revelation that just £3.5m changed hands is likely to reignite questions about the circumstances surrounding the deal.

The takeover is the subject of controversy given The Body Shop was tipped into administration just three months after its ownership changed. It led to hundreds of job losses after administrators at FRP closed swathes of stores. Taxpayers are covering the redundancy bill.

Concerns over the impact on public finances have led to MPs calling for a deeper review into what went wrong at The Body Shop, which has been a feature of Britain’s high streets since it was founded by Dame Anita Roddick in 1976.

Brazilian cosmetics giant Natura bought The Body Shop for £880m in 2017.

It has emerged that Natura is one of The Body Shop’s largest creditors as its subsidiary is owed £12.8m by the business. Aurelius has previously indicated that The Body Shop’s finances were allegedly in a worse state than expected after completing the takeover.

Aurelius and Natura declined to comment.