L'Oreal has entered exclusive negotiations with the Brazilian beauty product maker Natura Cosméticos to sell struggling skincare retailer The Body Shop in a deal worth €1 billion. The French makeup giant has owned The Body Shop since 2006.
L'Oreal informed investors in February that it was exploring 'all strategic options' regarding The Body Shop after the unit posted poor results, seeing its operating profit fall from €54.8 million in 2015 to €33.8 million in 2016. This led to an auction for the business, with a number of PE groups and strategic acquirers showing interest.
High-street retailers have long been fighting market encroachment from online shopping platforms, and the growth of ecommerce could be one reason for the The Body Shop's misfortunes. Over in the US, for example, venture capital investment into ecommerce companies steadily increased from 2012 to 2016. The Body Shop itself has tried to jump onto the trend as recently as this year, reportedly launching a £10 million digital revamp in April that included a mobile-first ecommerce platform.