Is The Body Shop for Sale?

After acquiring the natural beauty brand only 10 years ago, reports say that L'Oreal might be putting The Body Shop on the selling block.

“L’Oréal’s planned divestment of The Body Shop is perhaps unsurprising. While the company’s numerous brands advanced ahead in its key four divisions, in particular, the Luxe, Active Cosmetics and Professional divisions, The Body Shop trailed behind. In its home and largest market, the UK, growth has remained rather flat, hovering around 1% in recent years, in comparison to 2-3% for the total company,” commented Nicholas Micallef, Senior Industry Analyst – Beauty and Personal Care, Euromonitor International.

The Body Shop performed more strongly in Asian markets, such as India and Indonesia, where it achieved a double-digit CAGR over 2010-2015.

Micallef added, “As the French owner of a British brand, pulling the plug off the UK is probably too controversial, given The Body Shop’s British legacy. Simultaneously, allocating greater resources to the brand in Asia may not be L’Oréal’s priority. The company’s focus is to conquer China, which has been doing successfully with Garnier, launching the Ultra Doux line in 2016. Moreover, its 2014 acquisition of Magic Holdings, has yet to yield better results, and making this acquisition a worthwhile venture requires more efficient use of the company’s resources. The Body Shop is better suited in the hands of a beauty player seeking a lower-cost debut in Asia, and can take on the British brand as a stepping stone into the region.”