A person close to Aurelius said: “The business was found to be in a much worse financial position than it expected it to be.
“The deal was completed on January 1. Within a couple of weeks, they knew it was in a very different situation.”
However, questions have been raised over the nature of Aurelius’ cut-price takeover, as more than 2,000 jobs are at risk.
Aurelius is facing questions over an alleged failure to make payments worth £3m to a group of around 20 former employees in January, which was reportedly part of the agreement struck with The Body Shop’s former owners Natura.
It is understood that Aurelius invested less than £20m of equity in the deal, as Natura sold the business at a significant reduction compared to the £870m it paid in 2017.
A senior retail source with knowledge of The Body Shop said the failed payments to former staff represent the “unacceptable face of capitalism, the very extreme end of private equity”.
A person close to Aurelius rejected the claims and said the payments would be treated like any other financial obligation by the administrator.
Aurelius is understood to be in pole position to reclaim The Body Shop’s assets if no bidder materialises. The firm’s status as top creditor means it holds sway over the business’s future if it is not sold.
The retailer’s UK stores will remain open while administrators at FRP attempt to restructure the business and products will continue to be sold online.
In a statement last week, the administrators said: “The Body Shop has faced an extended period of financial challenges under past owners, coinciding with a difficult trading environment for the wider retail sector.
“Having taken swift action in the last month, including closing down The Body Shop At Home and selling its business across most of Europe and in parts of Asia, focusing on the UK business is the next important step in The Body Shop’s restructuring.”