Vulture Fund Closes The Body Shop and Employees Left without their wages

JupiterKid

Another faceless greed-driven vulture fund, this time a German one that acquired the iconic but struggling Body Shop in Ireland and the UK have summarily liquidated all its Irish operations without even informing staff, some of whom have been working in the chain for many years, who were told in a 20 minute Zoom call yesterday that they will not be paid for work over the past few weeks nor will they be receiving any redundancy payments.

This is just despicable - and it's sadly becoming more and more commonplace in the services and retail industry. As the trend towards online shopping, accelerated by the Covid-19 pandemic, puts more and more bricks and mortar high street retailers into serious jeopardy, I can only see situations like this one arising more and more unless the EU and/or the government bring in regulations to curb the excesses of vulture funds looking to make a quick profit on the distress of retailers.

This is not what the late Body Shop founder Anita Roddick, a firm advocate of ethics in business, stood for - she must be spinning in her grave.

Link to story:

https://www.thejournal.ie/the-body-shop-ireland-2-6313425-Feb2024/

kowloon

Another victory for late-stage capitalism.

Birneybau

This did not go as they wished

https://twitter.com/TheBodyShop/status/1270773993109434373

poppers

https://www.boards.ie/discussion/2058338566/vulture-fund-closes-the-body-shop-and-employees-left-without-their-wages

the joural themselves ran a story on 21st that they had announced that all irish shops were closing at end of month

https://www.thejournal.ie/the-body-shop-ireland-6305699-Feb2024/

Boggles

Not getting paid for work done?

Well, contents of till and safe commandeered.

As well as all high value stock.

Ebay closing down sale.

Divide amongst employees.

How are they evading the law in Ireland?

bog master

https://www.boards.ie/discussion/comment/121839135#Comment_121839135

Very good question!

https://www.boards.ie/discussion/comment/121838717#Comment_121838717

Have you been sitting on this tweet for four years, waiting for the right moment?

Allinall

https://www.boards.ie/discussion/2058338566/vulture-fund-closes-the-body-shop-and-employees-left-without-their-wages

How do you think the German vulture fund are making a “quick buck”?

From what I can see they’ve lost their shirt on this investment.

Jellybaby_1

Where is the Body Shop in Dublin? I thought it closed down years ago. Was it on Grafton St?

Gregor Samsa

https://www.boards.ie/discussion/comment/121839135#Comment_121839135

They’re not. The law allows them to do this. In fact, the law encourages them to do this

They’ll simply claim they have no money, go into liquidation, and the other creditors have a legal entitlement to the liquidation of the assets than the staff don’t.

Taxpayer will end up paying the statutory redundancy, back pay and holiday pay via the Insolvency Payment Scheme. Government can try to claw back some of it as a creditor, but they have to join the queue.

I.R.Y.E.D

https://www.boards.ie/discussion/comment/121839258#Comment_121839258

There was one on Grafton Street, one on Henry Street and Blanch and Omni SC.

Don't know about the Grafton Street one but the others closest years ago.

Birneybau

https://www.boards.ie/discussion/comment/121839159#Comment_121839159

No, Tweet above was in reply to this which led to boycotts of the Body Shop by their main customers, women.

https://twitter.com/jk_rowling/status/1269382518362509313?lang=en

https://twitter.com/TheBodyShop/status/1270773993109434373

https://www.boards.ie/discussion/comment/121839389#Comment_121839389

Shoehorning culture wars shite in everywhere, fair play to you.

Gregor Samsa

https://www.boards.ie/discussion/comment/121839220#Comment_121839220

I don't know the ins and outs of it, but this seems like a calculated move on behalf of the new owners. There's no way they bought the chain 3 weeks ago and only discover now that it's not a viable business. They would have had to do a ton of due diligence that would have revealed exactly the situation the company was in.

Maybe they write it off...

https://youtu.be/BAjxn2US7J8?si=9eqwRWy-lGxvnoqP

L1011

https://www.boards.ie/discussion/comment/121839389#Comment_121839389

Have you any evidence there was a boycott of any scale?

Most right wing boycotts come to absolutely nothing, because there's a tiny number of people involved who have somehow convinced themselves they're a "silent majority" when they're actually just a small noisy rabble.

The list of companies that are apparently being boycotted by various right wing groups is immense and it appears to be having absolutely no affect whatsoever, because the tiny group of super-online right wingers that "organise" them are too small to have any impact.

Mrs OBumble

https://www.boards.ie/discussion/comment/121839119#Comment_121839119

Tempting, but theft convictions will put a stop to future employment prospects.

Space Dog

https://www.boards.ie/discussion/comment/121839848#Comment_121839848

Well I think Budweiser's sales still haven't recovered fully from that stupid boycott.

eightieschewbaccy

https://www.boards.ie/discussion/comment/121841022#Comment_121841022

The main reason for the success of that boycott is that it's easy to move from one cheap crappy beer to another. A quick Google indicates they were getting on pretty atrociously back in 2017. In effect they simply failed to innovate and to compete in the market which has drastically grown.

https://www.bbc.com/news/business-38905530

L1011

https://www.boards.ie/discussion/comment/121841022#Comment_121841022

The main beneficiary of that was another beer from the same company.

Kermit.de.frog

"Vulture funds" always makes me giggle. You mean investors/pension funds etc? Let's give them their real titles instead of the emotional bs ones losers give them.

They make investments to back a business, they take the risk. They make money if they get it right and if the business doesn't perform they lose a lot of money.

It's beautiful.😍

JVince

Obviously planned structure to close stores around Europe and keep just high performance stores open.

Staff will get paid every cent they are owed.

The social insurance fund will become a preferred creditor just as revenue are.

The funny thing is that they could have started a great closing down sale leading up to mother's day and turned stock into cash and close on good terms.

Generally, investment funds are not great retailers and that has been proven time and time again.

Jim2007

https://www.boards.ie/discussion/2058338566/vulture-fund-closes-the-body-shop-and-employees-left-without-their-wages

You obvious know nothing about how these things actually work and are unwilling to even do a little critical thinking!

The management and the owner, if there is a difference, are 100% responsible for what happened. They made the business decisions, they borrow the money of the private investment funds and the bankers and they made the decisions as to how staff were treated in the end.

There will have been several attempts over the past months to try and raise additional financing for the company, but the the bottom line is that they were unable to show that there was any chance of turning around the business and making. success out of it.

The vulture fund nonsense is very convenient because it means you don't have to address the people behind the fund and of course it will sell advertising, the ones that actually put up the money - pensioners, charities, trust funds for wards of court and similar, private individuals, public bodies, family offices and so on. The funds make their profit from the fees they charge their investors, they are not putting up their own capital. There is absolutely no reason whatsoever for German citizens, residents or anyone else should being required to continue financing your loss making hobby horse.

As for your demand for EU/Government regulation, the only think that would happen is that these firms would have no breathing room and go bust faster plus start-ups etc would find it difficult to get off the ground because no fund manager will risk his clients funds in such a situation and most people would not even be willing to invest in such funds.

Varik

https://www.boards.ie/discussion/comment/121841138#Comment_121841138

What are you basing that on.

Allinall

You still haven’t explained how there is any profit made from what happened.

martingriff

https://www.boards.ie/discussion/2058338566/vulture-fund-closes-the-body-shop-and-employees-left-without-their-wages

Would it have been okay or more palatable if it wasn't a vulture fund that did this. Would you have even cared

Jim_Hodge

https://www.boards.ie/discussion/comment/121841577#Comment_121841577

I don't think it's a lack of empathy. It's more that you lay blame with the wrong people. You seem to ignore that the demise of Body Shop is down to those running Body Shop. You also ignore that the 'vulture fund' has lost considerable value.

Annasopra

https://www.boards.ie/discussion/comment/121838717#Comment_121838717

People didn't get paid for work and you are dragging some random tweet with a transphobic agenda. Disgusting. Shameful.

Annasopra

https://www.boards.ie/discussion/comment/121842086#Comment_121842086

It's absolutely lack of empathy when there's no concern at all for the workers.

Jim_Hodge

https://www.boards.ie/discussion/comment/121842247#Comment_121842247

You're reading what you want from posts to meet your own indignation.

https://www.boards.ie/discussion/comment/121841577#Comment_121841577

Anita Roddick was accused on the front page of the business section on the New York Times of very unethical practices, and she had no issue with selling her baby to L’Oreal.

This article is a pretty good summation of why BS we’re no longer relevant in todays market, like others I’m struggling to see what profit made by the current owners is being referred to.

https://theconversation.com/the-collapse-of-the-body-shop-shows-that-ethical-branding-is-not-a-free-pass-to-commercial-success-218733

Mrs OBumble

Whatever about history, the recent hiring practises of the Body Shop (giving the job to the first applicant who met the basic requirements, irrespective of someone better skilled applying 2 seconds later) can only be called "strange". Certainly not the practises of a business that wanted to be viable in a tough market.

Gregor Samsa

https://www.boards.ie/discussion/comment/121841612#Comment_121841612

Do you remember what happened with Clearys?

Natrium bought it on Friday June 12th 2015. Hours later, they were applying to the High Court to liquidate it.

Were Natrium so stupid that they bought an unviable business and didn’t realise until after they had done so, and suddenly had to close it down and lose all their money?

Of course not.

Gordon Brothers, who sold it, held Clearys under a company called OCS Investment Holdings, which in turn had two parts: OCS Operations Ltd, which ran the department store, and OCS Properties Ltd, which owned the building. OCS Operations leased the store from OCS Properties (even though both were owned by the same company).

Natrium bought OCS Investment Holdings for an undisclosed sum, then immediately split OCS Operations off as an independent company and liquidated it. They kept OCS Properties, which not only owned the building, but was a creditor of OCS Operations.

So not only do they end up owning a very valuable building, and not only do they divest themselves of the expenses and debts of the Clearys business, but they get to write off debts against tax that a few minutes ago they owed to themselves. The workers lose their jobs, the suppliers lose their customer, the taxpayer pays the unpaid wages and redundancy, and Natrium walks away with an iconic building in a prime location and a tax write off.

I don’t know the details of the Body Shop sale, but you can be 100% guaranteed that Aurelius knew exactly what they were doing when they bought it 3 weeks ago, and exactly what they were doing when they liquidated it on Friday.

Aurelius have done this before many times - it’s what they specialise in. One example is the electronics brand Blaupunkt. They bought them in 2009, split off the intellectual property to a new company and licensed it out, merged the (loss making) rest with another company called KWest and let that collapse. Chances are, we’ll see the Body Shop “brand” resurrected and licensed out after all the debts and pesky employees have been walked away from.

Make no mistake, there’s a profit being made here.

YellowLead

When will lefties understand that businesses have to be profitable to survive and that nobody is owed a job?! The writing has been on the wall for the Body Shop for years - such staff should have moved on elsewhere. Brands like Lush have taken a chunk of their market - a lot of what kept them going was middle aged women out of nostalgia for their teenage years.

eightieschewbaccy

https://www.boards.ie/discussion/comment/121844537#Comment_121844537

It's got feck all to do with lefties. They actively avoided paying workers for multiple weeks of work. That's pretty scummy and nobody is saying they're owed a job. But they did the work so shouldn't be left in the lurch over work they've done.

Annasopra

https://www.boards.ie/discussion/comment/121844537#Comment_121844537

People have not been paid for their work. Why are you defending that?

https://www.boards.ie/discussion/comment/121844574#Comment_121844574

No one is defending that, the poster is right though, it’s a fact of life that businesses fail, I don’t think this particular failure was unexpected, especially by staff.

YellowLead

https://www.boards.ie/discussion/comment/121844574#Comment_121844574

Okay, if they don’t get paid and cannot seek the money from any other scheme then that is awful. I missed that part - nobody should go unpaid for work they have done.

L.Ball

https://www.boards.ie/discussion/comment/121841193#Comment_121841193

There's also cuckoo & pigeon funds, although I've never looked into what the differences were. Not that I condone predatory Capitalist practices, but we've been fine with multinationals using us as a more respectable version of the Cayman's for decades, bit hypocritical to cry about the game as a whole at this point.

Annasopra

https://www.boards.ie/discussion/comment/121844623#Comment_121844623

Why should they be paid from schemes? Their employer owes them.

Rubberchikken

Yes not fair on staff to be dropped without much notice and without pay, as far as we can see, but the body shop had run its course in this country as far as I could see.

There are plenty of companies providing similar products with a.better range/price and the sustainable vegan etc ethos that has become so much more important today especially to the young who are the purchasers.

I remember admiring Anita Roddicks belief to open a business with strong beliefs behind it but business has to be profitable.

Leg End Reject

https://www.boards.ie/discussion/comment/121843199#Comment_121843199

I was just going to post about Roddick selling what was once a rare cruelty-free brand to L'Oréal, that alone damaged the brand.

The Body Shop was very expensive for what you got, and it still had the same products teenage me loved. There are far better alternatives available now so the business simply became outdated.

JupiterKid

Many of the frankly callous responses on this thread to the plight of the Body Shop workers left without being paid wages that they are owed has reminded me just why I very rarely post on Current Affairs these days.

God forbid if your own workplace went under, was wound up and "disposed of" by a vulture fund and you were also left without wages to put bread on the table and perhaps support a dependant family.

Allinall

https://www.boards.ie/discussion/comment/121846485#Comment_121846485

That’s overly dramatic.

The country is at full employment, with many sectors crying out for staff.

Nobody should be struggling to put bread on the table.

eightieschewbaccy

https://www.boards.ie/discussion/comment/121846504#Comment_121846504

It's not really, plenty of people on lower salaries are living week to week. So working multiple weeks and not getting paid for it isn't easy for plenty of people.

https://www.boards.ie/discussion/comment/121846504#Comment_121846504

That doesn’t really help someone to be employed if they do not get paid.

Frank Bullitt

https://www.boards.ie/discussion/comment/121846485#Comment_121846485

Are you familiar with how capitalism works in the modern world?

Annasopra

https://www.boards.ie/discussion/comment/121846504#Comment_121846504

No it's not. It's disgusting that people were not paid for their work and most of the responses or more or less - "so what"

Montage of Feck

Seems to be an increasingly common way of doing business, buy out a business and fire everyone then proceed to flog the brand with cheap crap.

https://www.boards.ie/discussion/comment/121847602#Comment_121847602

If the business has no prospect of being viable, the only alternative is to let it die. Having paid to buy it, I don’t think it is unreasonable for owners to salvage whatever value they can.

Jequ0n

https://www.boards.ie/discussion/comment/121847548#Comment_121847548

Why are we supposed to be outraged on others’ behalves if the issue doesn’t concern us at all.

This didn’t come out of nowhere and as others said the writing was on the wall. Some gambles didn’t pan out as planned there.