Beauty Bay staff were warned internally that the business was under pressure weeks before the online beauty retailer filed a notice of intention to appoint administrators.
The Salford-based online cosmetics retailer has taken down its website, which now shows a holding page with the message: “We’ll Be Back Soon. BEAUTY BAY is offline right now, we’ll be back shortly.”
A source said employees had been told the business urgently needed funding as efforts continued to stabilise the company.
Some staff were advised to begin exploring alternative roles on the same day the administration notice was filed, creating uncertainty around jobs and pay.
Beauty Bay is one of the UK’s best-known online beauty retailers, selling more than 200 brands alongside its own-label range.
Following the notice, creditors cannot pursue any action against Beauty Bay this week or next.
Molly Monks, an insolvency specialist and business expert at Parker Walsh, said the sequence of events reflects a familiar pattern in retail insolvencies.
“When a business is seeking a buyer or investor, staff are often made aware that the situation is serious before any formal insolvency process begins,” she said.
Beauty Bay, founded by owners Arron and David Gabbie as Fragrance Bay in 1999, has been seeking a sale or investment in recent weeks with advisory firm Interpath.
The brothers also launched a sale process in 2022, but that did not result in a transaction.
Monks said: “Administration does not automatically mean closure, but it does place jobs at risk while administrators assess whether a sale or restructuring is viable.”
For employees, the immediate concerns are unpaid wages, redundancy pay and holiday entitlement.
Monks said: “Once a company enters administration, it may no longer be able to meet wage or redundancy obligations directly.”
In many cases, affected staff must instead make claims through government-backed schemes.
She said: “Unpaid wages, notice pay and accrued holiday pay are commonly claimed through the Redundancy Payments Service rather than from the employer.”
Monks said staff should seek clarity early as the process develops.
“The Beauty Bay case shows how quickly circumstances can change once administration is filed, which is why employees should stay informed and take advice as soon as possible.”
Beauty Bay reported sales of £78.1 million in the year to 31st March 2024, up from £75.5m in the prior year.
Following a £5.6m loss in 2023, it returned to profitability (£836,000).