Natura & Co may soon offload The Body Shop

Natura & Co (NYSE: NTCO) is considering offloading “The Body Shop” – its world-famous brand of skincare and cosmetic products.

Sales at The Body Shop have continued to decline

The Body Shop is having a difficult time maintaining its market share even though beauty as a sector has been resilient this year amidst the broader inflation-driven weakness in retail.

Earlier this month, the Brazilian conglomerate said its Body Shop saw another 12% decline in sales to $163.7 million in the second quarter despite efforts to cut costs and improve margins.

Note that sales at the cosmetics and skincare brand have now eroded for several quarters in a row.

On Monday, therefore, the board of Natura & Co “authorised its management to explore strategic alternatives for The Body Shop” including a potential sale.

Natura is in the process of unloading Aesop as well

Natura & Co is the company behind notable beauty lines including Avon. In April, it also agreed to sell Aesop – its luxury cosmetics brand to L’Oreal for about $2.50 billion.

But it’s not a given yet that considering strategic alternatives for The Body Shop will indeed result in a sale, as per the company’s securities filing on Monday.

According to analysts at Itau BBA, though, it will be constructive for Natura & Co to sell The Body Shop as it may help the personal care giant improve its bottom line in the coming years.