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A dealmaker from Aurelius who helped lead its private equity takeover of The Body Shop has abruptly left the group only three months after the deal, The Telegraph has reported.
Peter Wood, who had held the position of managing director at the asset management company, reportedly faced criticism over the £207m deal, which saw it become top creditor to The Body Shop before its insolvency.
Last week, it was reported that the chain collapsed into administration, with 2,000 jobs at risk. Aurelius confirmed that it appointed FRP Advisory as administrator following the group’s collapse in the UK, and added that the retailer’s international business would not be affected.
The Body Shop was first acquired by Aurelius Group from Natura and Co for £207m last November.
At the time, Aurelius said it would work with its management team to “drive operational excellence” across the group, “leveraging its expertise and experience in the omni-channel retail and wholesale markets”.
According to The Telegraph however, it is understood that after completing the acquisition in January, Aurelius discovered The Body Shop’s finances “were in a much worse state than expected, sparking urgent discussions over what went wrong during the company’s due diligence process”.
A source close to Aurelius told The Telegraph: “The business was found to be in a much worse financial position than it expected it to be. The deal was completed on January 1. Within a couple of weeks, they knew it was in a very different situation.”
Reports said Aurelius was also facing questions over an alleged failure to make payments worth £3m to a group of around 20 former employees in January, which was reportedly part of the agreement struck with Natura.
A senior retail source said the failed payments represent the “unacceptable face of capitalism, the very extreme end of private equity”, but a person close to Aurelius rejected the claims and said the payments would be treated like any other financial obligation by the administrator.
The retailer’s UK stores will remain open while administrators at FRP attempt to restructure the business and products will continue to be sold online.
In a statement last week, the administrators said: “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.
“Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring.”
Aurelius declined to comment.
