Here’s Why Brazilian Beauty Leader, Natura, Might Be The Perfect Buyer For L’Oreal’s The Body Shop Brand
As L’Oreal revealed the prospective buyer for The Body Shop, the loyal users of this brand might have heaved a collective sigh of relief. As we had discussed earlier, L’Oreal was in talks with a few entities to sell off its The Body Shop, the brand that it acquired from Anita Roddick back in 2006. It has currently been revealed that the leading Brazilian beauty company, Natura, is expected to buy The Body Shop from L’Oreal for €1 billion and the deal is expected to close by the end of this year. The Body Shop might finally be owned by a company that follows the same principles of natural and eco-friendly beauty products and this might work in favor of the brand which has been going through a rough phase over the last few years. The brand, known for its ethical and organic products, received a backlash from its loyal users when a corporate giant like L’Oreal took control of it. Maybe, the lost image of The Body Shop will be slowly recovered once Natura takes ownership.
Natura is currently one of the largest beauty companies in Brazil that sells its products both through standalone stores as well as through direct-selling representatives. Besides Brazil, it has a wide presence in several Latin American countries including Argentina, Peru, Columbia, Chile, Bolivia, Mexico, as well as in France. With around 1.5 million sales consultants, Natura has surpassed the sales of the direct selling beauty company, Avon, in Brazil for over a decade. The Body Shop, on the other hand, has over 3,000 standalone stores in 66 countries. The Body Shop had been suffering from a steady decline in its sales over the last few years due to the dilution of its environment-friendly brand image and because of more powerful competitors in the natural beauty market. In 2016, its sales declined by 5% y-o-y to around €921 million and its operating profit declined by 38% y-o-y to €34 million. The joint entity of Natura and The Body Shop would churn out net sales of about €3.15 billion with a presence in around 3,200 stores across the globe.
The belief in common principles such as sustainable use of biodiversity, ethical means of production, and the stress on natural and environment friendly ingredients and packaging materials are some of the common themes that might unite the two companies and help in their expansion and growth with a larger customer base and global footprints. The Body Shop might finally witness a revival in its demand after struggling for years under L’Oreal’s ownership.
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