L’Oréal to sell The Body Shop
“For eleven years we have tried truly our best to kickstart [The Body Shop‘s] growth, to improve its profitability and appeal to more customers, and it must be recognised that in the last few years the results have fallen short of expectations,” admitted L’Oréal CEO Jean-Paul Agon. The French cosmetics giant’s boss added that, in these circumstances, the group’s responsibility was “to focus the energy of its team and the resources of its shareholders on what works best.”
“This is why we are now in the process of exploring, as they say, all possible options to find somebody who could perhaps acquire a full or limited stake in [The Body Shop],” he added.
The Body Shop is “a contemporary [brand], and for this reason we thought it had the potential to achieve significant growth again,” but “it has not managed to do so, and perhaps somebody else will succeed,” said L’Oréal CEO Jean-Paul Agon
According to L’Oréal’s CEO, The Body Shop may have been penalised because, being a brand with a contemporary flavour, based on biological products and natural cosmetic ingredients, it has suffered robust competition from other industry players.
On Wednesday the Financial Times wrote that L’Oréal envisaged selling The Body Shop for €1 billion, citing sources close to the matter. The British cosmetic brand and retailer was founded in 1976 and was acquired by L’Oréal in 2006 for approximately €940 million. In recent years it has been one of the group’s lingering weaknesses.
The Body Shop currently operates more than 3,000 stores in 66 countries, and last year its sales were worth €920.8 million, equivalent to a 4.8% shortfall (+0.6% in like-for-like terms and at constant exchange rates), far below the performance level of the group’s other divisions.