- Aurelius Group acquiring The Body Shop
- Potential lower valuation
- Ethical cosmetics chain transition
Footasylum’s private equity firm is currently engaged in exclusive negotiations with The Body Shop’s Brazilian parent company to acquire the company.
The Body Shop’s Ethical Legacy
The private equity investor currently holding Footasylum is well-positioned to acquire The Body Shop, an ethical cosmetics chain established around half a century ago by Dame Anita Roddick and her spouse, Gordon.
Valuation and Competitive Challenges
Aurelius Group is in exclusive talks with its Brazilian proprietor to acquire the British-based chain, listed for sale last summer.
This past weekend, banking sources reported that a contract was anticipated to be executed in November.
The sources added that, if finalized, a transaction is expected to value The Body Shop at a significantly reduced amount compared to the £400 million to £500 million estimated in certain media reports since the auction’s inception.
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On Sunday, a more precise price could not be determined.
Natura’s Prior Ownership
After competition regulators compelled JD Sports Fashion to sell Footasylum, Aurelius bought it a year ago.
It also owns Lloyds Pharmacy, which it bought from its American parent and sold in pieces.
Aurelius reportedly defeated rival suitors such as Elliott Advisors, the proprietor of Waterstones, Alteri Investors, and private equity firm Epiris in its pursuit of acquiring The Body Shop.
Natura’s Silence on the Matter
Naturala, a Brazilian corporation, owns The Body Shop, which has 3,000 outlets in 70 countries and 10,000 employees.
Despite protracted challenges in attaining profitable growth, the company continues to maintain a significant presence on British high streets.
In the 1980s and 1990s, The Roddicks gained a competitive edge over other shops by promoting environmental causes.
Additionally unprecedented in the decades following its inception was its opposition to cosmetic animal experimentation.
However, in recent years, The Body Shop’s uniqueness has been eroded due to the rise of competitors that have similarly prioritized sustainability in their operations while targeting younger consumers more effectively.
In 2007, Dame Anita passed away.
Natura bought The Body Shop for almost $1 billion in 2017, so Aurelius’s purchase is likely worth less than half that.
The Brazilian company has worked with Morgan Stanley underwriters on the sale and hopes to close by year’s end.
Before its acquisition by Natura, the cosmetics behemoth L’Oreal had possessed the property.
Seen concurrently, Natura and L’Oreal reportedly reached an agreement in April to sell the cosmetics brand Aesop for $2.5 billion.
With the exception of an August statement confirming the company was considering “strategic alternatives” for The Body Shop, Natura, a company listed in Sao Paulo, has refrained from making any public comments regarding the disposal procedure.
Natura refused to comment and could not be contacted for a response from Aurelius.
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