L’Oréal, the French cosmetics giant, is exploring a €1bn sale of its struggling retail unit The Body Shop, in a move that may see it jettison the ethical British skincare business it acquired just over a decade ago.

L’Oréal is working with bankers at Lazard on a review of its options for the unit with an outright sale among the most likely outcomes, according to two people with knowledge of the company’s thinking.

The review comes as sales at The Body Shop, which has over 3,000 stores in 66 countries, have continued to slump in contrast to the rest of L’Oréal’s performance. The French group is set to report its 2016 annual results on Thursday and it is expected to announce that has undertaken a strategic review of the asset, these people added. Some private equity suitors have already expressed interest in the business, one of them said. L’Oréal declined to comment.

A sale would come 11 years after L’Oréal agreed to purchase The Body Shop for £652.3m, in what was the first major acquisition by Jean-Paul Agon in the weeks before he formally assumed the role of chief executive.

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