 are reportedly considering a sell-off of its the Body Shop holdings, with a 3.2 percent decline in sales for the first half of 2016.){kind=link}
French cosmetics giant L’Oreal (EPA:OR) are reportedly considering a sell-off of its the Body Shop holdings, after a 3.2 percent decline in sales for the first half of 2016.
The Body Shop’s continually weak performance marks a contrast from L’Oreal’s own robust figures. Back in November, L’Oreal’s third quarter results revealed that sales at The Body Shop were down 5.4 percent, alongside a 2.8 percent dip in like-for-like sales. In addition, operating losses for the previous year rose significantly to €22.2 million from €7.2 million.
Conversely, the group as a whole had reported a total 5.6 percent rise in like-for-like sales, with consumer demand remaining strong for its brands such as Urban Decay, Lancôme, Armani and Yves Saint Laurent products.
Should the French beauty giant go ahead with its sale of its the Body Shop entities, this would end a decade long partnership with the ethical make-up and cosmetics brand. According to the Financial Times, L’Oreal have declined to comment ahead of the reveal of its full-year result for 2016 tomorrow. The Body Shop was previously acquired by the company for £652.3 million back in March 2006.
The Body Shop was founded in Brighton in the UK in 1976 by Dame Anita Roddick. It has expanded since to operate around 3,000 stores across 66 countries. The initial acquisition of the company by L’Oreal initially raised eyebrows among ethical campaigners however, due to L’Oreal’s reputation for the continued practice of animal testing.
Amid continual strain for the chain, the continued weak performance was attributed to a worsening economy in its Hong Kong and Saudi Arabian markets. Nevertheless, it maintained that it continues to intend to pursue expansion efforts across its major UK, Australian and Canadian markets.
In January, L’Oreal commenced the new year by announcing plans to acquire three additional skincare makes from Canadian company Valeant Pharmaceuticals International. The multi-national company is expected to pay $1.3 billion (£1 billion) for CeraVe, AcneFree and Ambi labels, which president and chief executive of L’Oreal USA Frederic Roze hailed as a move that would “nearly double the revenue of our Active Cosmetics Division in the US”.
Shares in L’Oreal are currently trading up by 0.55 percent as of 12.19PM (GMT).