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Natura aims to become a global cosmetics leader

L’Oréal and Natura Cosméticos have entered into exclusive discussions for the acquisition of The Body Shop by the Brazilian group for 1 billion euros. Natura, which also owns the Australian brand Aesop, intends to build on this acquisition to become a global beauty leader and to diversify its distribution channels.

Acquired by L’Oréal in 2006, The Body Shop is a British brand of nature-inspired cosmetic products. Founded in 1976 by Anita Roddick in Brighton, England, The Body Shop has expanded into a global leader in natural beauty, with the deep-rooted belief that business can be ethical and sustainable. The Body Shop is now present in more than 60 countries around the world, through various distribution channels including more than 3,000 point of sales (130 in Brazil) and e-commerce. In 2016, it generated retail sales of around 1.5 billion euros and net sales of 921 million euros.

Similar values and a shared vision

Natura is the best new owner we could imagine to nurture the brand DNA around naturality and ethics,” said Jean-Paul Agon, Chairman & CEO of L’Oréal.

Indeed, the values of Natura Cosméticos - which offers products made from natural ingredients, in particular Amazonian nuts or berries sustainable and ethically sourced from communities - are very close to those of The Body Shop.

"Natura and The Body Shop have always followed parallel paths that are now converging," said Guilherme Leal, co-chairman of Natura Cosméticos’ board of directors of.

Geographical complementarity

However, as far as their geographical presence and distribution channels are concerned, the two companies are very different.

Most of The Body Shop's turnover comes from sales in its own or franchised (...)

Most of The Body Shop’s turnover comes from sales in its own or franchised shops in Europe, in Asia and in North America. (Source: Natura)

The Body Shop is present in more than 60 countries around the world, mainly in Europe, Asia, North America and the Middle East, but its footprint in South America (Brazil and Chile) is quite smaller (2% of the global turnover). The Natura brand, on the other hand, is mainly present in Brazil and in South America. The Brazilian company, which initiated its international development in 2013 with the acquisition of Aesop, finds in the acquisition of The Body Shop the opportunity to dramatically accelerate its global growth.

Furthermore, the acquisition of The Body Shop will help Natura to accelerate the diversification of its distribution channels while offering the opportunity to expand the presence of the British brand in Brazil through its network of 1.3 million consultants.

The proposed transaction will be submitted to L’Oréal’s employee representative body and is subject to regulatory approval notably in Brazil and in the United States. According to L’Oréal, the proposed transaction is expected to close during 2017.

Vincent Gallon

© 2017 - Brazil Beauty News - www.brazilbeautynews.com

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