Natura wants to rejuvenate The Body Shop and will not sell Avon – 04/04/2023 – Market

The British brand The Body Shop, which was once an icon of sustainable cosmetics, with an activist stance on the consumption of beauty products, has aged and needs to be revamped. This is the analysis made by Natura, the Brazilian multinational that owns the brand, according to the company’s president, Fabio Barbosa.

Created by Anita Roddick in the 1970s, The Body Shop was one of the first companies in the sector to abolish the testing of ingredients on animals and to promote fair trade with communities that supply natural raw materials –such as the nuts extracted by the Kayapo Indians, in the Amazon.

“It is necessary to revitalize the brand”, said Barbosa, who participated in a teleconference with journalists this Tuesday morning (4th), to comment on the sale of Australian Aesop to French L’Oréal, announced on Monday (3rd). “The Body Shop no longer attracts a young audience, we are going to reduce the number of SKUs [itens]make the stores cleaner, more welcoming”, he said, emphasizing that the work at The Body Shop is fundamentally related to repositioning marketing.

“I worked for 12 years at Nestlé and I know that, when the brand is good, it doesn’t make sense to offer promotions like ‘buy 3 and get 4′”, he said. “This type of action can even happen at times, but not all the time, as has been happening with The Body Shop.”

Interestingly, The Body Shop, which passed into the hands of L’Oréal in 2006, was sold to Natura in 2017. Now, L’Oréal has bought Aesop from the Brazilian company for US$ 2.53 billion (R$ 12.7 billion). billion). According to Barbosa, the purpose of the deal was to “deleverage” the company, which had a high level of debt.

Natura ended 2022 with a net debt of BRL 7.4 billion, around 7.8 times its Ebitda (earnings before interest, taxes, depreciation and amortization).

According to Barbosa, Aesop is expanding in the eastern market and it was necessary to make greater investments, but Natura did not have available capital. With the sale of the operation, the scenario changed. “But it’s not because we have cash now that we have to spend,” said the Executive.

Summoned in the middle of last year to make Natura return to profit, Barbosa has in his curriculum the presidency of Santander Brasil and Febraban (Brazilian Federation of Banks).

“I’m not going to go from brand to brand asking: ‘How much do you need right now'”, he said. “I’m going to ask which businesses each one has to invest at the moment that will bring a good return,” she said.

No plastic pots at Avon

In addition to The Body Shop and Natura itself, the company owns Avon – an acquisition announced in 2019 and completed in January 2020, which gave rise to the fourth largest beauty conglomerate in the world, after L’Oréal, P&G and Unilever.

Analysts heard by Sheet pointed out the need for Natura to focus on the Latin American market, its main consumer, and possibly sell the Avon International operations, where Avon’s operations outside Latin America are gathered.

Fabio Barbosa ruled out that possibility.

“Avon International’s sale is not on the table,” he said. “There is a synergy to be explored by the Avon and Natura brand in Latin America. In other countries, we are going to analyze market by market and see what the options are”. Last year, the company stopped operating in Albania, in Eastern Europe, and also left India, where it started to operate the brand with a strategic partner.

“We are going to remain in the countries that present the best financial return,” stated Barbosa.

In addition, according to the executive, the Avon brand will focus on cosmetics and stop investing in the sale of household products, such as plastic pots, for example.

“These are products that are not part of the company’s main business and do not make sense within our strategy.”