The Body Shop goes into administration
The latest casualty of the difficulties hitting the high street is The Body Shop, which entered administration on 13 February 2024.
Administration can be a worrying time for employees as well as customers and suppliers. However, administration is not as serious as when a company immediately goes into liquidation. Let us explain.
When a company goes into administration, it essentially means that it is placed under the management of licensed insolvency practitioners. These insolvency practitioners, known as administrators, help salvage the business or its assets. This process is typically started when a company is struggling financially and cannot pay its bills or other financial obligations.
During administration, the administrators take control of all the company’s operations, finances and assets. Their goal is to maximise the returns for creditors. This might involve restructuring the business, selling off parts of the business, or seeking new investment that will stabilise the company’s financial position.
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Going into administration provides the company with protection from legal action by creditors, giving it breathing space to weigh up its options and find a solution. It can also help to preserve jobs. And because it allows for a more orderly resolution of the financial difficulties the company is facing, it helps to keep more value for the various stakeholders in the business.
Ultimately, the aim of administration is either to rehabilitate the company and return it to a solvent trading position, or to achieve a better outcome for creditors than would be possible through an immediate liquidation.
If you have any concerns about your company’s financial position, please contact us at your convenience. We will be happy to talk and guide you through the options available to you.