Natura & Co reveals plans to sell The Body Shop as revenue falls

Cosmetics maker, Natura &Co Holdings is considering the sale of The Body Shop, according to a security filing seen by MARKETING-INTERACTIVE. This comes as The Body Shop sees another quarter of declining sales. Q4 net revenue, according to financial reports, declined by 8.4% at constant currency.

Natura &Co wrote in the filing that its board of directors “recently authorised its management to explore strategic alternatives for The Body Shop.” The alternatives, the document stated, includes a “potential sale” of the business.

“There can be no assurance that this process will result in any transaction. Natura does not intend to comment on or provide updates regarding this matter unless and until it determines that further disclosure is appropriate or required based on the then-current facts and circumstances,” the filing said. 

Don't miss: L'Oréal acquires Aesop for a whopping US$2.5 billion

This comes shortly after Natura &Co denied any rumors about it considering the sale of Body Shop or the restructuring of its business. In a securities filing in September, the group said that it is not conducting any study on the sale of its companies.

The group is also currently in the process of selling its Aesop line to L’oreal for US$2.5 billion. Earlier this year in April, Natura &Co said that it reached an agreement under which Loreal will acquire Aesop to "[open] a new chapter of the luxury brand's growth" after 10 years under Natura &Co. The transaction however is still subject to customary regulatory approvals and is expected to close in Q3 2023, according to Natura &Co. 

Natura &Co added that with the transaction, it will be able to strengthen and deleverage its balance sheet, freeing up resources to focus on its strategic priorities, notably the integration in Latin America, as well as the further optimisation of Avon International's footprint and the improvement of The Body Shop´s business.

"This is an exciting day for Aesop. We now enter the next phase of our development and I'm confident that with L'Oréal's partnership we will be able to bring our exceptional skincare products to even more people and continue to expand our brand globally," said Michael O'Keefe, the CEO of Aesop.

MARKETING-INTERACTIVE has reached out to The Body Shop for more information.

Under the umbrella of Natura &Co, Aesop has seen gross sales increase from US$28 million to US$537 million. The number of stores and counters also increased from 52 to 395 globally as Aesop expanded its geographic footprint from 8 markets to 29.

The divestment of Aesop marks a new development cycle for Natura &Co. With a strengthened financial structure and a deleveraged balance sheet, Natura &Co, exercising strict financial discipline, will be able to sharpen its focus on its strategic priorities, notably our investment plan in Latin America," said Fabio Barbosa, CEO of Natura &Co. He added that the brand will continue concentrating on improving The Body Shop's business and refocusing Avon International's footprint. 

Join #PRAsia on 2 November in Singapore and 8 November in Malaysia, connecting 100+ PR and communication leaders worldwide to share ideas, forge partnerships, and unlock endless possibilities.

Related articles:
The Body Shop Malaysia's franchisee InNature earns B Corp certification
Interview: How The Body Shop stays accountable in its push for sustainability
The Body Shop MY walks the sustainability talk with new interactive store