Brazilian cosmetics company Natura & Co said on Monday that it is considering selling The Body Shop, a latest sign that it is backpedaling on the aggressive acquisition spree it launched a few years ago.
Natura is exploring “strategic alternatives” for its wholly-owned retailer of cosmetics, perfume and skin care products, “which may include a potential sale of this business,” it said in a securities filing.
This comes four months after Natura sold its Australian luxury brand Aesop to the French cosmetics firm L’Oréal for $2.5 billion.
Natura acquired The Body Shop from L’Oréal in 2017 for $1 billion, sparking an aggressive push abroad that included the acquisition of Aesop and the US cosmetics company Avon in 2020 for nearly $2 billion. The goal was to create the fourth largest beauty company in the world.
Natura, however, has since faced issues to integrate the new assets, recently calling The Body Shop a “challenging operation.”
Natura’s net sales fell 12.5% to BRL800.3 million ($163 million) in the second quarter of 2023 from year-earlier period, while it also racked up losses of BRL732 million in the second quarter. The company’s debt/EBITDA ratio also rose to 2.2 in the second quarter from 1.9 a year earlier, according to its financial results.
Natura’s shares rose 4% at the opening of trading on Monday, ending the session up 2.2% at BRL15.62 on the B3, São Paulo’s stock exchange.
Earlier this month, Natura said it had started integrating its administrative and commercial operations in Brazil, Colombia and Peru.