French cosmetics giant L’Oréal has asked business bank Lazar to investigate the different options for the environmentally-conscious store chain The Body Shop, but it is likely the ailing chain would be put up for sale.
Increased operational loss
The chain, founded in 1976 by Anita Roddick, has more than 3,000 stores across 66 countries. It is mostly known for its ethical principles, like the refusal to sell cosmetics that were tested on animals. L’Oréal acquired the chain in 2006 for about a billion euro and it expects to generate at least that amount if it decided to sell, despite The Body Shop’s mounting losses over the past few years.
In the first half of 2016, The Body Shop’s turnover dropped 0.6 % to 368.6 million euro and its operational loss grew from 7.2 million euro to 22.2 million euro. The company blamed weaker performances in Hong Kong and Saudi Arabia, but did also highlight further expansion of its most important markets, like Canada, Australia and the United Kingdom.
