L’Oréal confirms it is ‘exploring’ sale of Body Shop

French cosmetics giant L’Oréal confirmed in its full-year results on Thursday that it is “exploring all strategic options” regarding the ownership of The Body Shop, the British ethical skincare business it acquired just over a decade ago.

The announcement comes after the Financial Times revealed on Wednesday that L’Oréal is working with bankers at Lazard on a review of its options for the struggling retail unit, with an outright sale among the most likely outcomes.

L’Oréal said that the strategic review of The Body Shop comes as part of “brand portfolio optimisation…in order to give it the best opportunities and full ability to continue its development.” No decision has been taken so far.

On Thursday after market close L’Oréal said that like-for-like
revenues grew 4.7 per cent in 2016 to €25.8bn. It recorded an
operating profit of €4.5bn, representing 17.6 per cent of overall
sales.

In contrast sales at The Body Shop, which has more than 3,000 stores in 66 countries, have continued to substantially underperform the rest of the group.

L’Oréal said on Thursday that The Body Shop’s like-for-like revenues grew 0.6 per cent to £920.8m during 2016, and were down 4.8 per cent on a reported basis.