The Body shop Files for Bankruptcy in US and Canada

The U.K.-based chain filed for Chapter 7 liquidation in New York last week, according to a court filing. The filing means the company’s U.S. operation will sell off certain assets to pay back its creditors. Earlier this month, the beauty store confirmed it had filed for restructuring in its home country, the United Kingdom, as well as in Canada.

While some stores in those countries will remain open, the chain indicated it was shuttering its remaining U.S. locations. As it is struggling to pay suppliers in Australia as the group’s most profitable overseas businesses struggle with cash shortages after its UK parent’s collapse last month, putting about 400 jobs at risk including those in a distribution centre that still holds millions of dollars worth of stock.

In Canada, 33 of the 105 shops have closed, with the loss of more than 200 jobs.

In Australia, where the group operates almost 100 stores and is responsible for more than 20 more in New Zealand, it is understood that the future of the chain is hanging in the balance as it struggles to cover large debts after its access to funds was cut off.

The Body Shop’s UK arm collapsed in February, only months after a German private equity group, Aurelius, bought the group founded by the late environmental and human rights campaigner Anita Roddick. The deal was completed in January and the UK business was put into administration less than six weeks later.

Aurelius is the top creditor of the UK business and, as it controls the brand rights, is in pole position to reclaim The Body Shop from administrators. Other potentially interested parties are thought to include Next, as well as the HMV owner Doug Putman.

The Body Shop’s divisions in Germany, Denmark, Ireland, and Belgium have all been put into insolvency, with stores outside Germany closed, after being sold by Aurelius to Alma24.

The future of The Body Shop’s operations in Spain, Sweden, France, and Austria is unclear amid wrangling over ownership.