Performance Decline: 'The Body Shop' Put Up for Sale

The Body Shop, a British natural cosmetics brand facing deteriorating performance, has been put up for sale on the market.

Natura &Co announced on the 28th (local time) in a filing submitted to the U.S. Securities and Exchange Commission (SEC) that "the board recently approved an agenda to explore strategic alternatives including the sale of The Body Shop," adding, "the sale plan is under review and nothing has been finalized yet." A British media outlet reported, citing financial investment industry sources, that Natura &Co has been in discussions with several private equity firms as potential buyers of The Body Shop. The sale price has not been disclosed.

Rumors of The Body Shop’s sale also surfaced at the end of last year, but Natura &Co denied any consideration of a sale at that time. The Body Shop has suffered from worsening performance due to changes in distribution channels in the cosmetics market triggered by the COVID-19 pandemic and intensified competition from similar brands. Its sales in the second quarter were 800 million Brazilian reais (approximately 217.4 billion Korean won), down 12% compared to the same period last year.

U.S. economic media CNBC pointed out, "While the beauty industry is enjoying a boom despite overall retail sluggishness caused by high inflation and high interest rates, The Body Shop is the only one missing out on this boom." The Body Shop is a British cosmetics brand advocating naturalism, offering a wide range of products from skincare and body care to perfumes. It operates 3,000 stores in 70 countries worldwide and employs over 10,000 people.

[Image source=Reuters Yonhap News]

The parent company Natura &Co grew into the world’s fourth-largest cosmetics group by acquiring the Australian cosmetics brand Aesop in 2013 and L’Or?al’s The Body Shop in 2017. However, since the replacement of key executives including CEO Fabio Barbosa in June last year, the company has undergone a major organizational restructuring. Subsequently, to reduce costs and debt, Natura &Co sold Aesop to the French cosmetics group L’Or?al in April for $2.5 billion (approximately 3.31 trillion Korean won).

Foreign media expect Natura &Co’s divestment moves to continue for the time being. Bloomberg and CNBC reported, "Natura &Co, which had expanded through mergers and acquisitions (M&A) in recent years, is now reversing its global expansion policy and focusing on the Latin American market," adding, "additional sales are also being considered to reduce costs and improve profitability."

Natura &Co’s stock, listed on the S?o Paulo Stock Exchange, closed at 15.62 reais, up 2.23% from the previous session. After news of The Body Shop’s sale broke, buying surged and the stock price rose more than 6% intraday, but profit-taking sales later reduced the gains. Natura &Co’s market capitalization stood at 21.5 billion reais (approximately 5.84 trillion Korean won) based on the closing price that day.

This content was produced with the assistance of AI translation services.