An Ontario court has granted The Body Shop Canada the necessary approval to sell most of its business to a private equity firm.
During a virtual hearing Friday, Justice Peter Osborne allowed the sale of the cosmetics retailer to an affiliate of Markham, Ont.-based Ceruya Private Equity Inc.
“Fingers crossed and good luck,” Osborne told Seruya before ending the brief hearing.
The private equity firm, led by co-founder Yogen Frues, has invested in automotive, real estate and fast-food businesses, including St. Louis Bar & Grill, Second Cup and Swensen's. It did not respond to requests for comment.
The Body Shop Canada would be a new type of attack for the firm, which lawyers told Osborne was “sophisticated” and well-positioned to take on the troubled retailer.
The Body Shop Canada began shopping in July. It filed for creditor protection in March, after it closed 33 stores and accused its parent company of being starved of cash and driven into debt.
More closures are on their way.
Court documents show Seruya will purchase 59 properties owned by The Body Shop Canada. Those properties include stores at West Edmonton Mall, Toronto Eaton Centre, Vancouver's Pacific Center and Halifax Shopping Centre.
The Body Shop is closing 33 stores in Canada and ending online sales. Some experts attribute the chain's decline to increased competition in the ethical-beauty space.
After The Body Shop Canada closed 33 stores earlier in the year, 72 remain.
Lawyers acting for The Body Shop Canada said sites not acquired by Seruya will begin liquidation soon.
As part of the takeover, lawyers say 600 employees, including 100 seasonal workers, will be issued layoff notices, but about 500 will be rehired by the new owner.
In addition to receiving approval for the sale, the court also agreed not to name the price Seruya will pay for The Body Shop Canada's assets.
Natalie Reiner, a lawyer representing the retailer, said she considered the price to be “commercially sensitive”.
He argued that if the price was disclosed and the deal did not close as planned on Monday, it would harm any subsequent sales process the company had to resort to.
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