L’Oréal consider selling The Body Shop
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L’Oréal consider selling The Body Shop

French beauty giants L’Oréal have got businesses and products across a range of everything from beauty to skincare and cosmetics. However, if reports are to be believed they are now considering selling one of their most high profile high street businesses.

According to widespread reports earlier this week, L’Oréal are looking at selling The Body Shop in a €1 billion deal. The French firm bought the retail unit, which has been struggling in recent years, less than a decade ago for £650 million, so a sale would be quite a bold move.

The Body Shop, known for their ethical and sometimes curious skincare products, has over 3,000 stores in 66 countries and so are no small fries. The British brand has been struggling in comparison with the rest of L’Oréal’s unit’s performance.

Arash Massoudi, writing in The Financial Times, has reported: ‘L’Oréal is working with bankers at Lazard on a review of its options for the unit with an outright sale among the most likely outcomes, according to two people with knowledge of the company’s thinking.

‘The French group is set to report its 2016 annual results on Thursday and is expected to announce that it has undertaken a strategic review of the asset, these people added. Some private equity suitors have already expressed interest in the business, one of them said.’

In November, L’Oréal’s third quarter reports showed that the reported sales growth of The Body Shop was down 5.4% and the retailer also suffered a 2.8% drop in like-for-like sales.

Anita Roddick, a social end environmental campaigner who wanted friendlier, and more guilt-free cosmetic options founded the Body Shop in 1976 in Brighton. Since then, it has grown into the major retailer it is today, but kept the ethical stance at the heart of their culture and operations.

However, although The Body Shop has a strong high street presence, they only account for a small fraction of ‘L’Oréal’s overall sales, which came in at €12.89 billion for the first half of 2016. 

Disclosure
Dominion holds L'Oréal in its Global Trends Luxury Fund. 



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