A €1 billion deal is being finalized between the Brazilian cosmetic giant Natura and L'Oreal for the sale of the latter's The Body Shop brand. Natura is the owner of the Aesop brand. The deal is likely to be finalized before the conclusion of the year, market analysts believe.
Looking to give The Body Shop the best options
L'Oreal had put up The Body Shop for sale earlier this year, stating that it wished to explore all options and get the best for the chain which carries with it a 40-year-old legacy. The idea is to give The Body Shop a chance to grow further. However, since L'Oreal acquired the chain in 2006, it has not been in the best of the condition and has constantly struggled to keep its head above water. The 11-year period has not been a favorable one for the Sussex-based business, which has steadily lost its customer base over time. One of the key problems has been that many customers were unhappy with the transition to L'Oreal.
Losing its sheen
L'Oreal has also witnessed this close at hand. The Body Shop's main appeal has always been its eco- friendly label and the fact that it was viewed as a brand that combined latest trends with planet-friendly products. However, this appears to be inadequate now, perhaps because of the many other brands making inroads in the same niche. The waning appeal that The Body Shop has for customers is clear in its diminishing profits which took a massive 38% hit last year.
Natura is the perfect choice to take The Body Shop forward
The Brazilian cosmetics company has earned a formidable reputation for its ethical practices and environment-friendly products and processes. In fact, both Natura and The Body Shop have many similarities in the focus areas, both being brands highly focused on eco-friendly product ranges. If the sale goes through, Natura will be building on its strengths and The Body Shop will be finally in a position to regain some lost ground as well. L'Oreal Chief Executive Jean- Paul Agnon has also publicly stated how ideal the marriage of the two would be. He has said that Natura is the 'best new owner' that The Body Shop can possibly get. As of now, there appear to be no roadblocks to this sale that may revive The Body Shop and set it on the path to profitability once more.