Excessive avenue stalwart The Physique Store is teetering on the brink, with the enterprise trying prone to be a part of the deluge of UK manufacturers getting into into administration.
A troublesome interval of buying and selling has compelled The Physique Store’s new house owners, personal fairness investor Aurelius, to nominate directors and probably start an insolvency course of. The enterprise, which dates again to 1976, is predicted to make an announcement in regards to the subsequent steps this week.
With over 200 retailers throughout the UK, the collapse of the Physique Store model may put hundreds of jobs in danger. However, what went incorrect for the once-thriving UK enterprise? We clarify the tendencies that labored in opposition to it, and if there’s any hope for salvaging the model.
Why has the Physique Store struggled?
The Physique Store is, after all, removed from the one excessive avenue enterprise to have struggled lately. An unrecognisable retail panorama has led to a number of UK manufacturers getting into into administration. This will contain closing a number of branches; going online-only, or the whole dissolution of a one-time favorite retailer.
For The Physique Store, a number of elements have led to its current predicament:
Poor Christmas buying and selling
The Aurelius group bought The Physique Store enterprise just a few weeks earlier than Christmas. Nonetheless, a disappointing interval of festive buying and selling has since led to the probably must appoint directors, simply a few months later.
Companies which might be reliant on the essential November via January buying and selling interval are deeply vulnerable to “one dangerous Christmas”. Most famously, the collapse of the Woolworths enterprise was tied to a sequence of underwhelming vacation gross sales durations, the place the model would sometimes see sturdy buying and selling. A poor Christmas commerce for Woolworths in 2007 was adopted by the announcement in November 2008 that it wouldn’t even attain its subsequent festive gross sales window.
For The Physique Store, a dire buying and selling interval final December damage the model badly, with prospects eschewing the everyday present bundles that had been as soon as a dependable Christmas vendor.
Overhang of unpaid workers bonuses
On prime of its complications over a poor buying and selling interval, The Physique Store’s proprietor, Aurelius, has a pricey legacy downside on its fingers.
In response to an unique discovering from Retail Week, earlier house owners Natura & Co have despatched authorized instruction to Aurelius over an obligation to fulfil a long-term incentive scheme for workers. Retail Week has realized that round 20 former Physique Store workers could possibly be owed bonuses price collectively £2m-£3m.
The ache of on-line retail
It’s hardly information that retail tendencies have shifted dramatically in the direction of on-line retail. For the reason that COVID pandemic hit, quite a few excessive avenue companies that had been reliant on footfall and in-person shopping have suffered, as online-only rivals grew.
Natalie Hitchins, Head of Dwelling Merchandise & Providers at UK client organisation Which?, sympathises with The Physique Store’s scenario, however recognises its plight from her personal buying habits, too.
“I haven’t shopped there in years – it’s a little bit of a nineties traditional,” Hitchins tells us. “It’s a disgrace in the event that they go, as a result of the shampoo I like is from there. However, even that, I’ve been shopping for from Amazon.”
It’s potential that The Physique Store model is salvaged in some kind through the administration course of, which may see its merchandise – like that favorite shampoo – nonetheless out there for on-line buy, together with via different retailers.
Failing to maintain up with Gen Z shopping for tendencies
It appears the subsequent technology of shoppers isn’t trudging to The Physique Store to load up on skincare merchandise.
Whereas it’s tempting to suppose that each one of Gen Z’s purchases are on-line solely, this isn’t essentially the case. Savvy excessive avenue manufacturers can preserve must-have gadgets in inventory, and leap aboard the sense of viral buy pleasure. For example, much-hyped skincare model Bubble has gone viral on TikTok, and is now mentioned to promote an merchandise within the UK each ten seconds. The vary has rolled out throughout 200 Boots shops since January 2024, in addition to being out there on-line at boots.com.
With a staler model that hasn’t saved tempo with the buying energy of the youthful market, The Physique Store has been prone to fading as a related retail vacation spot.
The Physique Store to hitch the collapse of excessive avenue manufacturers
The UK excessive avenue is a shadow of its former self. Since COVID and the price of dwelling disaster hit, quite a few UK manufacturers have entered into administration.
One of many newer collapses was the Wilko chain, which went via an agonising interval of “will-they, gained’t-they” earlier than getting into into administration on August tenth final 12 months. A possible deal to avoid wasting 51 Wilko shops fell via the next month.
Different excessive avenue manufacturers together with Debenhams, Monsoon / Decorate, Oasis and the varied companies of the Arcadia Group all fell into administration lately.
Whereas a few of these companies have been capable of keep a extra restricted presence, via a smaller variety of shops, or online-only buying and selling, different UK manufacturers have been wiped from the map. It stays to be seen how a lot of The Physique Store enterprise will survive the approaching administration course of, however quite a few shops and jobs are prone to be impacted.
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