Natura &Co offloads The Body Shop to Aurelius in £207M deal to streamline focus on LATAM

15 Nov 2023 --- Cosmetics company Natura &Co has agreed to sell The Body Shop to international private equity group Aurelius. The sale, valued at £207 million (US$258 million), aligns with Natura &Co’s commitment to “simplifying and refocusing” its business.

Under the transaction terms, Aurelius will acquire The Body Shop for an enterprise value that includes an earn-out of £90 million (US$112 million), payable up to five years after the closing, expected by the end of December.

“We are delighted to acquire an iconic British brand which pioneered the cruelty-free and natural ingredient movement in the health and beauty market. We look forward to working with CEO Ian Bickley and his team to drive operational improvements, re-energise the business and help to deliver the next chapter of success,” comments Tristan Nagler, partner at Aurelius.

The agreement is subject to customary regulatory approvals, with Morgan Stanley acting as the financial advisor and Cleary Gottlieb Steen & Hamilton as the legal advisor to Natura &Co.

Eyes on Avon
The strategic move allows Natura &Co to hone in on priorities in LATAM and intensify its focus on key brands, including integrating Natura and Avon brands in LATAM.Avon opened its first UK stores this week since its 137-year founding (Image credit: Avon).

“With the sale of The Body Shop, we are taking another important step in Natura &Co’s new development cycle to unlock significant value. Refocused, deleveraged and leaner, Natura &Co will now be able to fully concentrate on its core relationship selling expertise in LATAM while also continuing the optimization of Avon International’s footprint and investing in initiatives and innovations that positively impact people and the planet,” comments Fabio Barbosa, CEO of Natura &Co.

Meanwhile, Avon opened its first UK stores this week since its 137-year founding, featuring approximately 150 products. This decision follows a successful retail performance in Turkey over the past three years.

“We are on the cusp of new frontiers for Avon,” says Avon International global chief executive Angela Cretu. “It is an exciting new chapter. Women like to touch and experience the product and enjoy seeing all the colors available.”

The location and number of stores have yet to be revealed. However, Avon has expanded its partnership with Superdrug to dock its products at Superdrug’s 800 retail stores and online shop.

Transition for transformation
Aurelius claims it will be enhancing its ESG aspects to maintain The Body Shop’s “long-standing, distinctive values,” instilled by its founder, Dame Anita Roddick. She spearheaded the campaign to end animal testing in cosmetics for nearly 35 years. Founder, Dame Anita Roddick (Image credit: The Body Shop).

“We are pleased to have found a strong home for The Body Shop to write the next chapter in its remarkable story, and we extend our sincerest thanks to all The Body Shop’s associates, who contributed immensely to broadening Natura &Co’s horizons. We wish them continued success under the stewardship of Aurelius,” says Barbosa.

The Body Shop, under Natura &Co’s ownership since 2017, has experienced a portfolio overhaul and brand revitalization. It includes a contemporary store redesign, introducing the Changemaking Workshop to enhance global stores and customer experience and implementing a successful refill program in nearly 800 stores. 

“We celebrate a truly historic moment for The Body Shop as we join forces with Aurelius to begin a new chapter, allowing us to continue building the relevancy of this global brand for future generations. With a presence in over 80 countries, The Body Shop is a beauty brand and an iconic social business that has captured hearts in nearly every corner of the world,” adds Bickley.

“We are deeply grateful to Natura &Co for their unwavering support, and I’m looking forward to working with Aurelius as we adapt and flourish in new global retail environments, always with an eye on sustainable and profitable growth.”

The Body Shop and Aurelius initiated exclusive negotiations last month, when the price of the sale was predicted to be lower than the previously estimated £400 to £500 million (US$485 to US$606.6 million) range.

By Venya Patel