Brazilian cosmetics maker, Natura, has agreed to sell its UK-based subsidiary, The Body Shop, to private equity group Aurelius for £207mn.
The sale comes after Natura struggled to revive the fortunes of the global brand, which it acquired in 2017 for £880mn. The deal gives Aurelius control of The Body Shop’s 3,000 stores in over 70 countries, as well as its online presence.
The Body Shop was founded in 1976 by Dame Anita Roddick, who grew the company into a global brand known for its ethical and environmentally friendly products.
However, in recent years, the company has faced increased competition from other natural beauty brands and struggled to maintain its market share. Natura’s acquisition of The Body Shop was seen as a way to revive the brand, but the Brazilian cosmetics maker has been unable to turn the company’s fortunes around.
The sale of The Body Shop to Aurelius marks a new chapter for the global beauty brand and is part of Natura’s strategy to focus on its core business.
The Brazilian cosmetics maker also owns beauty brands such as Aesop and Avon.
Natura & Co has agreed to sell The Body Shop to private equity firm Aurelius Group for GBP 207 million. Aurelius Group is an investment firm that specializes in acquiring companies that are in need of operational improvements.
The firm has experience in both turnaround and growth situations, and it is known for its relationship selling expertise.
Ian Bickley, the former CEO of Coach, and Tristan Nagler, a private investor, will lead the acquisition for Aurelius. They plan to work closely with The Body Shop’s management team to develop and improve the company’s strategy, operations, and product offerings.
Financial Aspects and Valuation
The enterprise value of the transaction is GBP 207 million, and there is an earn-out component that could result in additional payments to Natura & Co based on
The Body Shop’s net profit over the next two years. Natura & Co has indicated that it intends to use the proceeds from the sale to pay extraordinary dividends to its shareholders and to deleverage its balance sheet.
Impact on Natura and The Body Shop
The sale of The Body Shop is part of Natura & Co’s ongoing organizational shakeup, which has included the acquisition of Avon International and the refocusing of its operations in Latin America.
The company has stated that it wants to simplify its business and increase its profitability by focusing on its core brands and improving its operational discipline.
The sale of The Body Shop will allow Natura & Co to optimize its development cycle and allocate capital to its core strengths. The Body Shop will benefit from Aurelius’s expertise in operational improvements and growth strategies.
Future Strategies and Direction
The sale of The Body Shop will enable Natura & Co to refocus its efforts on its core purpose-driven group of brands, which includes Avon, Aesop, and Natura. The company is certified as a B Corp™, which means it has met rigorous standards for social and environmental performance, transparency, and accountability.
The Body Shop will continue to operate as a subsidiary of Natura & Co, and it will remain a certified B Corp. The company has stated that it will work closely with Aurelius to develop a new strategic plan that will focus on growth and profitability.
Regulatory Approvals and Closing Details
The transaction is subject to regulatory approvals and other closing conditions. Natura & Co’s board of directors has authorized the company to search for strategic alternatives for The Body Shop, and the company has indicated that it expects the transaction to close in the near future. According to Reuters, the sale of The Body Shop is part of Natura & Co’s efforts to simplify its business and increase its profitability by focusing on its core brands and improving its operational discipline.
The Body Shop’s Evolution and Future Prospects
The Body Shop was founded in 1976 by Dame Anita Roddick, a British entrepreneur and environmental activist. Over the years, the brand has evolved from a small shop in Brighton to a global brand with a presence in over 60 countries.
The Body Shop’s brand identity is built around its commitment to social and environmental causes. The brand has been a strong advocacy voice for animal welfare, human rights, and environmental protection. The brand’s refill program, launched in 2019, allows customers to refill their bottles and reduce plastic waste. The brand has also been at the forefront of promoting cruelty-free and vegan beauty products.
The retail experience at The Body Shop stores is designed to be immersive and engaging. The stores are designed to reflect the brand’s commitment to sustainability, with eco-friendly materials and natural elements used in the store design.
Product Portfolio and Development
The Body Shop’s product portfolio includes skincare, haircare, body care, and makeup products. The brand has a strong focus on natural and organic ingredients, and has been a pioneer in developing products that are cruelty-free and vegan.
In recent years, The Body Shop has expanded its product portfolio to include more premium and luxury products, such as its Oils of Life range. The brand has also divested its non-core brands, such as the Australian beauty brand Aesop, to focus on its core portfolio.
Commitment to Sustainability and ESG
The Body Shop has a strong commitment to sustainability and ESG (Environmental, Social, and Governance) aspects. The brand is a certified B Corp™, which means it meets the highest standards of social and environmental performance, transparency, and accountability. The brand has set ambitious sustainability commitments, such as becoming carbon positive by 2030 and protecting 10,000 hectares of forest and other habitats by 2025.
Omni-Channel Retailing and Expansion
The Body Shop has been expanding its omni-channel retailing capabilities, with a focus on e-commerce and mobile commerce. The brand has also been expanding its presence in new markets, such as through partnerships with retailers like Footasylum and catering group LSG Sky Chefs.
The recent sale of The Body Shop by Natura to private equity firm Aurelius for £207mn in November 2023 is expected to have a positive impact on the brand’s future prospects. The new ownership is expected to provide the brand with the necessary resources to continue its growth and expansion, while maintaining its relevancy in the highly competitive beauty industry.
In conclusion, The Body Shop’s evolution over the years has been driven by its commitment to people and the planet. The brand’s strong sustainability commitments, product portfolio, and customer experience have made it a leader in the beauty industry. With its new ownership, The Body Shop is well positioned to continue its growth and expansion, while maintaining its commitment to sustainability and social responsibility.
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