Home
Distressed Businesses
  • All Distressed Businessess
  • Administrations
  • Liquidations
  • Winding Up
  • Insolvency Advice  New
Buy a Business
  • All Businesses for Sale
  • Find a Business for Sale
  • Raising Business Finance
  • Buyer Acquisition Service   New
  • Escrow Service   New
Sell a Business
  • Sell Your Business
  • List your Business
  • Seller Accounts
  • Need Help Selling?
  • Help With Finance New
  • Corporate Services  New
  • Business Valuation
  • Business Wanted Adverts
Insights & News
  • View All News
  • View All Insights
  • Exclusive Insights New
  • Video Insights
Lens
  • Search all UK Companies  New
Log in
Join Now

Home / News / L’Oreal mulling €1bn sale of struggling Body Shop

L’Oreal mulling €1bn sale of struggling Body Shop

Thu, 09 Feb 2017 | BUSINESS SALE

French cosmetics giant L’Oreal is considering a €1 billion sale of The Body Shop, the struggling ethical British skincare firm it bought for £652 million about a decade ago.

The Financial Times reports that L’Oreal has appointed financial advisory Lazard to review options for the unit, with an outright sale earmarked among the “most likely outcomes”, according to two people familiar with the situation. Private equity houses are among the likely suitors, it’s thought.

The Body Shop was founded in 1976 by the late Dame Anita Roddick. With its use of natural ingredients for beauty products, it was a high street success, with rapid expansion following its launch.

But recent times has seen the unit - which still has more than 3,000 stores around the world and employs more than 20,000 people - face some difficult challenges, with sales underperforming when compared to L’Oreal’s overall performance. The Body Shop posted sales of €600 million for the first nine months of last year; in the same period, L’Oreal made €19 billion.

L’Oreal is set to publish its 2016 annual results this week when it is widely expected to confirm it is exploring the future of its retail unit.

Some analysts think The Body Shop’s woes are down to L’Oreal’s leadership and, should it be sold, could well be revitalised.

"They [L'Oreal] are trying to get rid of it because it's underperforming,” Warwick Business School’s Professor John Colley told BBC News.

“But anyone bidding will see a clear turnaround. Independent ownership would probably serve the firm well. A refreshed image would almost certainly work.”

Harsha Wickremasinghe, associate at Livingstone, comments: "It is surprising that an owner of the magnitude of L’Oreal has failed to capitalise on the potential The Body Shop had. However, L’Oreal's strengths lie in developing and nurturing brands, not as a retailer operating a sprawling store estate. Whilst it represents a small sales contribution to L’Oreal, it will undoubtedly be a source of frustration for the cosmetics giant that they could not drive the business forward in the way they anticipated when they acquired it in 2006."

Previously viewed as an innovator, The Body Shop has lost its way in recent years. The messaging is mixed, the product proposition is not compelling enough and its stores lack inspiration and the retail theatre that is required to draw shoppers through its doors. Unsurprisingly, the competition has become fierce in recent years with rivals such as Lush boasting a stronger proposition whilst effectively communicating its strong ethical stance to their customer base.

Wickremasinghe added: "Furthermore, The Body Shop is heavily exposed to the UK, one of the most competitive beauty markets globally. Whilst its brand equity is flagging here, it is still well regarded overseas - particularly in Asia. As a result, there is a significant opportunity for a new owner to drive growth across this region.

“Maintaining such a cumbersome store estate in a sector where consumers are rapidly shifting online is difficult to justify in the long term. I expect a new owner could look to slim its UK store portfolio and divert a significant share of marketing spend to reinvigorating sales online."

Find retail businesses for sale.


Share this article



Latest Businesses for Sale

Football Equipment Retailer
North West, UK

E-commerce retailer of football equipment to schools football clubs & the general public. Key products include specialist training equipment footballs goals & other coaching materials.

Asking Price: Offers Invited
Turnover: £2,350,000

Fibre Optic Network Build Engineers
North East, UK

Specialist utility services provider delivering contract services for telecommunications & fibre-optic networks. Works include the installation of ducts micro-ducts access chambers street cabinets & fibre optic cable installation for major blue-chip...

Asking Price: Offers Invited
Turnover: £8,581,000

Transportation Services
North East, UK

Provides bus & coach services on behalf of local authorities universities & private companies throughout the North East of England.

Asking Price: Offers Invited
Turnover: £2,934,000


View more businesses for sale

News Search

Latest News

 
22
 
Jan
 

630,000 UK businesses in “significant financial distress”, according to report | BUSINESS NEWS

According to the most recent Red Flag Alert research from Be...

 
21
 
Jan
 

ProCook considering sale as it undertakes strategic review | BUSINESS NEWS

Kitchenware retailer ProCook is to undertake a strategic rev...

 
20
 
Jan
 

Modulaire Group extends UK presence with Carter acquisition | BUSINESS SALE

Modular space leasing business Modulaire Group has announced...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources

Become a Member

News Categories

  • - Business Sale
  • - Division Sale
  • - Administration
  • - MBO/MBI
  • - Merger
  • - Commercial Property

View all news


About Us

Business Sale Report is the UK's leading independent business for sale & distressed business listing service. Established in 1995, the report offers an up-to-the-minute, comprehensive overview of businesses for sale, latest distressed business listings and daily acquisition news.

Our Services

Businesses for Sale
Distressed Companies
List a Business
Help with Finance
Buyer Acquisition Service
Daily Financial Alerts
Small Businesses for Sale

Company

About Us
Insights
News
FAQs
Reviews
Terms & Conditions
Privacy Policy

Get In Touch

020 8875 0200
[email protected]
167 Oakhill Road, London, SW15 2QW
Working hours: Mon-Fri, 9am - 5:30pm


Sign up to our free newsletter



© 1995-2021. Business Sale Report Ltd. All rights reserved. www.business-sale.com.