An Ontario court has given The Body Shop Canada the approval it needs to sell the majority of its business to a private equity firm.
During a virtual hearing on Friday, Justice Peter Osborne allowed the cosmetics retailer to proceed with a sale to an affiliate of Markham, Ont.-based Serruya Private Equity Inc.
“Fingers crossed and wishes for success,” Osborne said to Serruya before concluding the brief hearing.
The private equity firm is led by the co-founder of Yogen Fruz and has invested in automotive, real estate and fast-food businesses including St. Louis Bar and Grill, Second Cup and Swensen’s. It has not responded to requests for comment.
The Body Shop Canada will be a new kind of foray for the firm, which lawyers told Osborne is “sophisticated” and well-positioned to take on a beleaguered retailer.
The Body Shop Canada started shopping itself around in July. It filed for creditor protection in March, when it closed 33 stores and blamed its parent company for stripping it of cash and pushing it into debt.
More closures are on their way.
Court documents show 59 properties owned by The Body Shop Canada will be purchased by Serruya. Those properties include stores at the West Edmonton Mall, Toronto Eaton Centre, the Pacific Centre in Vancouver and the Halifax Shopping Centre.
The Body Shop is shutting down 33 stores in Canada and stopping online sales. Some experts attribute the chain’s downfall to increased competition in the ethical-beauty space.
After The Body Shop Canada closed 33 stores earlier in the year, 72 remained.
Lawyers acting on The Body Shop Canada’s behalf say those sites not acquired by Serruya will soon begin liquidation.
As part of the acquisition, lawyers say about 600 employees, including 100 seasonal workers, will be issued termination notices, but roughly 500 will be rehired by the new owner.
In addition to getting approval for the sale, the court also agreed not to name the price Serruya will pay for The Body Shop Canada’s assets.
Natalie Renner, a lawyer representing the retailer, said she considers the price “commercially sensitive.”
She argued if the price was divulged and the deal doesn’t close as planned on Monday, it would harm any subsequent sales process the company would have to resort to.
Read More: The Body Shop Canada sells majority of its business, 100 workers to lose