How The Body Shop Vietnam does business

By Tat Dat   March 17, 2024 | 06:23 pm PT
How The Body Shop Vietnam does business
An outlet of The Body Shop in Thu Duc City, December 2023. Photo courtesy of The Body Shop Vietnam
Operated by a Malaysian firm in some Southeast Asian locations, cosmetics retail chain The Body Shop Vietnam posted its first loss last year after three years of declining profits.

InNature Berhad, which owns The Body Shop Vietnam, said that the company has been unaffected by the shutdown of The Body Shop U.S. operations last week. The company also operates The Body Shop in Malysia and Cambodia.

The Body Shop, a 50-year-old brand founded in the U.K, has been scaling down its operations in the U.K. and Canada.

The first The Body Shop store in Ho Chi Minh City opened in 2009. After 15 years, it now has 41 outlets nationwide.

Revenues before Covid-19 were on the rise from VND112 billion in 2018 to VND162 billion in 2020. Its annual growth rate of over 20% were higher than InNature Berhad’s revenue, which dropped 8.8%.

Post-tax profit went up 65% to VND23 billion in 2019 but dropped 14% the next year.

In 2020 The Body Shop Vietnam accounted for 20% of InNature Berhad’s revenue.

But the post-pandemic market posed challenges to The Body Shop Vietnam. It saw revenue declining 18% in 2021 while profits plunged by two-thirds.

An 12% increase in revenue in 2022 was not able to match pre-Covid figures, while profit continued to fall.

The Body Shop Vietnam therefore posted its first loss at VND5 billion in 2023 on a revenue of VND136 billion, while the Malaysia and Cambodia markets still recorded profits.

The Southeast Asian business, however, remains bright when compared to the European and American business.

Increasing competition and prolonged financial challenges have caused major difficulties to the company.

In November last year, The Body Shop was sold to its third owner with a valuation of $260 million, a quarter of the 2007 figure.

The Body Shop U.K. became insolvent last month and had to restructure.

Aurelius, a European private equity firm, has now taken control of the business. It has expressed optimism that it could re-energize the iconic British brand "despite the challenging retail market."

The Body Shop has become known globally for its commitment to ethical business practices and its focus on producing cruelty-free and environmentally sustainable products. It is popular for its range of natural and ethically sourced ingredients, as well as its campaigns advocating for animal rights, fair trade, and environmental conservation.

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