Taxpayers are set to pay millions of pounds to sacked staff of The Body Shop as administrators manage a mass restructuring of the collapsed chain.
Employees who have been laid off from the ethical beauty retailer have been told to make claims through the government-backed redundancy payouts service, which is funded using national insurance contributions, The Telegraph reported.
It comes as administrators said on Tuesday that it would begin closing down some of its 198 stores and axing 40% of head office roles, to around 400 full-time staff.
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Details of the The Body Shop’s restructuring were relayed to staff in a video call on Tuesday where administrators at FRP said the retailer’s presence on the high street was no longer viable.
The Body Shop’s stores on London’s Oxford Street and Canary Wharf, as well as Ashford Town Centre in Kent and Queens Road in Bristol are among the seven that closed earlier this week.
It is not yet known which locations will remain open but FRP said it hopes to retain “more than half” of the current store estate.
The Body Shop’s fall into administration has increased scrutiny on private equity firm and LloydsPharmacy owner Aurelius, which snapped up the retailer in a cut-price deal from Natura for £207m just three months earlier.
Aurelius is listed as the retailer’s top creditor and is understood to be in pole position to reclaim The Body Shop’s assets if no bidder materialises.
It will not be responsible for redundancy payments.
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