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Companies & industry

Euromonitor on Natura’s acquisition of The Body Shop

Brazilian cosmetics company Natura Cosméticos has appointed David Boynton as chief executive officer of Britain’s The Body Shop. Boynton will replace Jeremy Schwartz, effective December 04, 2017. According to Euromonitor, the recent acquisition of The Body Shop by Natura makes sense in terms of shared values and portfolio consistency.

Natura Cosmeticos acquiring The Body Shop makes sense in the context of Natura’s existing portfolio and its shared values,” comments Hannah Symons, beauty and personal care analyst at Euromonitor.

Retail strategy

For several years, Natura has been experimenting retail strategy through its small high-end brand Aesop. “Upon purchasing Aesop in 2012, Natura has facilitated the sustained growth of the brand’s best-in-class, mono-brand retail strategy,” said Hannah Symons.

Building on this experience, Natura opened its first own physical store in Sao Paulo in 2016, a radical move considering that direct-selling has historically strongly underpinned the company’s DNA. “This was a clear signal of a change in retail tack for the company, which is why the acquisition does not come as a surprise,” added Symons.

In parallel, after having entered the Brazilian market in October 2013 with the acquisition of 51% of Emporio Body Store, The Body Shop had initiated an ambitious retail plan in Brazil. However, with an e-commerce presence and 130 shops in Brazil, the actual situation of The Body Shop in the country remained far below its initial goals.

Similar values and a shared vision

According to Euromonitor, The Body Shop being a pioneer of ethical sourcing and social responsibility in the beauty and personal care industry, makes it a perfect match for Natura’s green approach to production and plant-based heritage.

These shared values will help nurture the defining integrity of The Body Shop on an even greater global stage. This comes at a crucial time when many consumers are redefining their priorities and ethical consumption is topping agendas,” commented Hannah Symons.

Geographical complementarity

While sharing common ethical values, the two companies are very different in their geographical presence.

Most of The Body Shop’s turnover comes from sales in its own or franchised shops in Europe, in Asia and in North America. (Source: Natura)

Most of The Body Shop’s turnover comes from sales in its own or franchised shops in Europe, in Asia and in North America. (Source: Natura)

Whilst the majority of The Body Shop’s 2016 sales came from developed markets, Natura’s strength lies in the emerging regions, account for 98% of its value in 2016. Undoubtedly this exposure will provide a necessary springboard for The Body Shop to expand further into valuable emerging territories to help revive growth. In this case the acquisition would be a happy marriage; reducing Natura’s reliance on Brazil, whilst mitigating The Body Shop’s risk in stagnating developed regions,” concludes Symons.

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