Dive Brief:
- With sales dropping, Natura & Co’s board has authorized management to explore strategic alternatives for The Body Shop, according to a Monday Securities and Exchange Commission filing.
- The Brazilian cosmetics conglomerate said that alternatives could include a potential sale of the beauty brand, per the filing.
- Natura & Co — which also operates its namesake brand and Avon — noted that there is no guarantee that the process will result in a transaction and the company does not plan to comment on it unless further disclosure is necessary.
Dive Insight:
Natura & Co’s move to explore strategic options follows decreasing sales at The Body Shop and leadership changes.
The Body Shop CEO David Boynton announced in April that he would exit the company after five years in the role. Natura & Co Board Director Ian Bickley took on the interim CEO position for the beauty brand while it searches for Boynton’s successor.
The company tasked Bickley and The Body Shop’s leadership team with expanding its current business plan to “return to sustainable revenue.”
The Body Shop’s top-line earnings remain “challenging” for Natura & Co, according to its second-quarter earnings press release from Aug. 14. Net revenue for the beauty brand during the quarter was down 12% year over year to 800 million Brazilian reals (about $163 million at the time of publication).
Natura & Co acquired The Body Shop from L’Oréal in 2017 in an effort to help the company’s global and multichannel growth. L’Oréal had bought the beauty brand in 2006.
If the Brazilian company were to sell The Body Shop this year, it would be the second sale for Natura & Co in 2023. The company entered into an agreement to sell Aesop to L’Oréal in April for $2.5 billion. The deal is expected to close in the third quarter. Natura & Co acquired a majority stake in Aesop in 2012 for about 68 million Australian dollars.
