Cosmetics giant L’Oreal is in exclusive talks with ethical Brazilian company Natura Cosmeticos over the sale of Body Shop.

According to L’Oreal the proposed transaction value is set at €1bn, and the deal is set to be finalised by the end of the year, subject to regulatory approval in Brazil and the US.

For Natura, the prospect of acquiring such an established retail player, operating with the same values with regards to responsibility, ethics, and a focus on natural sounds like a great deal.

The two would have combined net sales in the region of €3bn.

For Natura, which mainly uses a direct selling model, the acquisition will certainly boost the company’s global retail presence.

Currently, the company is present in seven countries with its Natura brand, and 14 with its Aesop brand.

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By GlobalData

In comparison, Body Shop has outlets in over 60 countries worldwide offering a significant benefit in distribution and giving Natura Cosmeticos a truly global reach.

Nevertheless, the benefits of this transaction are not solely confined to the buyer.

Being the parent company of premium natural brand Aesop which is offered in standalone retail stores, Natura is already well-versed in the innovation required to make a success of brand-cum-retailers.

For Natura’s Aesop brand there is clear continuity of the brand across its entire portfolio in terms of messaging and packaging as well as a pared back offering which is easy-to-understand and identify with.

This also assists in promoting its sleek, premium positioning.

Since being sold to L’Oreal in 2006, Body Shop has operated under a company which specialises in brands rather than retailers.

In turn Natura’s expertise could stand Body Shop well to rejuvenate and refresh its image, retail experience, and offerings which have struggled to become embedded in consumers’ daily beauty and personal care regimens.

Similarly the multitude of ranges and products available from the brand, while delivering on novelty, have also served to reduce clarity on the brand ethos and meaning.

Natural claims are becoming more and more established, and even expected, with three in five people saying that they are interested in and already buying natural beauty and grooming products according to a recent GlobalData survey.

While this highlights the potential of this space, it is also serving to create an even more challenging environment for green players such as Body Shop.

Nevertheless its acquisition by Natura could be a significant step in redefining its core values and becoming a more dynamic, responsive brand with products firmly embedded into consumers’ daily beauty and personal care regimes.