Brazilian company Natura considers selling The Body Shop.
Brazilian Cosmetics Maker Natura &Co Considers Strategic Alternatives for The Body Shop
SAO PAULO (Reuters) – Brazilian cosmetics maker Natura &Co announced on Monday that its board of directors had authorized the company to explore “strategic alternatives” for its subsidiary, The Body Shop. This includes the potential sale of the business.
The move comes after Natura &Co recently sold its luxury brand Aesop to French cosmetics group L’Oreal for $2.53 billion. Analysts at J.P. Morgan believe that a sale of The Body Shop, valued at approximately $511 million, is the most likely outcome due to the Aesop divestment and Natura’s strong focus on Latin America.
Investors reacted positively to the news, with Natura &Co’s shares surging more than 5% during mid-morning trading. J.P. Morgan analysts also noted that the potential sale could lead to “extraordinary dividends.”
Natura &Co decided to sell Aesop as part of a broader organizational shakeup, which saw former CEO and executive chairman Roberto Marques step down last year. The company has been striving for profitability after posting six consecutive quarters of losses.
In a recent call with analysts, Natura &Co executives acknowledged that The Body Shop had negatively impacted the company’s bottom line due to changing consumer behavior during the COVID-19 pandemic.
Analysts at Itau BBA believe that a potential sale of The Body Shop would be beneficial for Natura &Co, as it could improve the company’s profitability in the future.
($1 = 4.8916 reais)
(Reporting by Gabriel Araujo and Kylie MadryEditing by Mark Potter)
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