L’Oréal, France headquartered beauty giant, has been carrying out an extensive review into its strategic options for The Body Shop in recent months, and has now entered into exclusive discussions with Natura.
“I am very pleased to announce Natura as the potential new “home” for The Body Shop. It is the best new owner we could imagine to nurture the brand DNA around naturality and ethics. Natura will support The Body Shop development in the long-term and enable The Body Shop to best serve its customers while respecting its strong commitments towards its employees, franchisees and stakeholders,” said Jean-Paul Agon, chairman and CEO of L’Oréal.
What is The Body Shop, and why is it up for sale?
The Body Shop is considered one of the very earliest originators of today’s ongoing major consumer trend for naturals and ethical product offerings.
Founded in 1976 in Brighton, England, by Anita Roddick, it has become a global beauty play in the intervening years, offering skin care, hair care and makeup with strong ethical and sustainable profiles.
In 2006, L’Oréal acquired the brand, and it is now present in more than 60 countries around the world, through various distribution channels including more than 3,000 point of sales and e-commerce.
In 2016, it generated retail sales of around 1.5 billion euros and net sales of 921 million euros.
On L’Oréal’s announcement of the potential Body Shop sale earlier this year, commentators acknowledged that the beauty retailer has been beset by a poor performance over recent years, prompting L’Oréal’s decision to consider a sale. Indeed, at the start of this year, The Body Shop reported a 38% slump in full-year operating profits, with sales having fallen nearly 5% to €920.8m.
Who is Natura?
Natura Cosméticos is a Brazilian manufacturer and marketer of beauty products, household, and personal care, skin care, solar filters, cosmetics, perfume and hair care products.
After integrating The Body Shop, the combined Natura group would have a turnover of R$11.5bn, with 17,000 employees and 3,200 stores, according to the Financial Times.
“I am sure that all customers, employees, franchisees and stakeholders of The Body Shop will join me in welcoming L’Oréal’s decision to enter into exclusive discussions with Natura. The ethical values and expertise of Natura make it the perfect new owner for The Body Shop to accelerate the rejuvenation of the brand and its future expansion,” said Jeremy Schwartz, Chairman & CEO of The Body Shop.
The proposed transaction will be submitted to L’Oréal’s employee representative body1 and is subject to regulatory approval notably in Brazil and in the United States. The proposed transaction is expected to close during 2017.