The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
PARIS, France — French cosmetics maker L'Oréal confirms it is considering the sale of its retail unit The Body Shop.
In the company's earnings release, chief executive officer Jean-Paul Agon said "it has been decided to explore all strategic options" for the subsidiary, but that the company had made no decisions yet. The Financial Times had earlier reported that the business could be sold for about €1 billion ($1.1 billion).
The Body Shop has not performed as well as the wider company, with a 6-percent decline in sales in the fourth quarter of 2016. L'Oréal's overall sales rose 5 percent in the same period.
Its net income, however, fell to €3.1 billion last year from €3.3 billion in 2015 due to one-time charges it booked.
By selling existing formulas under their own name, retailers can tap into the lucrative beauty market without investing in custom formulations. But that doesn’t mean the private label model is an easy win.
The San Francisco-based company is hoping to tap growing consumer demand for financing for cosmetic treatments among other services.
Once thought of as long-term disruptors who would change the way we shop forever, multi-brand online retailers that sell cosmetics, skincare, fragrance and more are facing multiple headwinds.
Prestige makeup is fashion’s category expansion du jour. But even the market’s most powerful players could learn a thing or two from its celebrity-backed competition.