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Natura &Co Considers a Sale of The Body Shop

Published August 29, 2023
Published August 29, 2023

What a difference a year makes. Late last year, Natura &Co denied rumors of a potential sale of The Body Shop. After another quarter of declining sales, the Brazilian beauty conglomerate is considering “strategic alternatives” for the business. Encumbered by a heavy mall footprint in the US, The Body Shop has struggled with profitability, posting six consecutive quarters of losses. The company saw sales decline 12% during its second quarter. 

This news comes after an announcement in April that The Body Shop CEO David Boynton was exiting the company after five years at its helm. Ian Bickley, a board director at Natura &Co, replaced him as interim CEO. 

The Body Shop was founded in 1976 by the late environmentalist Anita Roddick and her husband Gordon, who pioneered the concept of ethical consumerism. Today The Body Shop has 10,000 employees across 3,000 stores in about 70 countries. L'Oréal bought the brand in 2006 for $1.14 billion and sold it to Natura &Co in 2017 in a $1.1 billion deal.

In a Securities and Exchange Commission filing, the company disclosed that its board of directors recently authorized management to explore strategic alternatives for The Body Shop, which may include a potential sale of this business.

It was reported by The Financial Times that The Body Shop had already been presented to potential private equity investors, but Natura said in the filing, “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.”

Citi analyst João Soares told The Financial Times he assumed “a conservative valuation” for The Body Shop of about five to seven times 2024 earnings, while analysts at J.P. Morgan told Reuters the brand would be valued around 2.5 billion reais ($511 million).

The move comes as the Brazilian company is closing the sale of luxury personal care brand Aesop to L'Oréal at an enterprise value of $2.53 billion.


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