L’Oréal is selling The Body Shop to Natura in €1 billion deal

It has been announced this month that ethical beauty retailer, The Body Shop, will be sold in a €1 billion (£877 million) deal to Brazilian cosmetics company, Natura. They already own the Aesop brand. It is thought that a deal will be finalised later this year.

L’Oréal first put The Body Shop up for sale in February 2017, having struggled to make a success of the 40-year-old business since its founder, Dame Anita Roddick, sold it to the world’s largest cosmetics company (a move many saw as a betrayal from its ethical foundations) for £652 million in 2006.

The Body Shop

Once viewed as an on-trend eco-friendly label leading the way in eradicating animal testing from the beauty and cosmetics industry, The Body Shop has seen operating profits decline in recent years, dropping by 38% to €34 million in 2016. Sales sank by almost 5% to €921 million. This is despite having over 3,000 stores in 66 countries, 133 of which are based in its new owner’s home of Brazil.

Once viewed as an on-trend eco-friendly label leading the way in eradicating animal testing from the beauty industry, The Body Shop has seen operating profits decline in recent years…

This compares with rival business, Lush, co-founded by Mark Constantine, a former Body Shop staffer. In 2016, with over 930 stores in 49 countries, they saw sales increase by 26% to £723 million, and a rise in pre-tax profits by 76% to £43.2 million. This was driven by moving to larger stores and engaging with younger shoppers online.

For Natura, it is hoped that the acquisition will be part of a decisive step towards internationalisation. The turnover from The Body Shop will make the company approximately half the size of Natura, which is the largest cosmetics company in Brazil. It was founded in 1969 in São Paulo by Antônio Luiz Seabra, who remains the company’s biggest shareholder.

The Body Shop

When commenting on the new deal, Guilherme Leal, co-chair of Natura’s board, said: “Natura and The Body Shop have always walked in parallel, and today their paths meet… The complementarity of our international footprints, the sustainable use of biodiversity in our products, a belief in ethics in management and fair relations with communities and a high degree of innovation constitute the pillars of the journey on which we are now embarking.”

Natura and The Body Shop have always walked in parallel, and today their paths meet…

This was added to by Jean-Paul Agon, chair and chief executive of L’Oréal, who said Natura was “the best new owner we could imagine to nurture the brand DNA around naturality and ethics.”

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