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Natura &Co sells Aēsop to L'Oréal for £1.81 billion

Tom Shearsmith
04 April 2023

L'Oréal has reached an agreement to acquire Aēsop, opening a new chapter of the luxury beauty brand's growth story after 10 years under Natura &Co's stewardship.

Under the transaction, L'Oréal will acquire Aēsop for £1.81 billion ($2.525 billion). The transaction is still subject to customary regulatory approvals and is expected to close in Q3 2023.

Aēsop was founded by the Melbourne-based hairdresser Dennis Paphitis in 1987 and has been majority-owned by the Brazilian cosmetics multinational Natura &Co for over a decade. Paphitis began the company after blending essential oils into his hair products. He originally named the business Emeis, which is the Greek for “us” but renamed it to Aēsop two years later in 1989.

Since becoming part of Natura &Co in 2012, Aēsop has posted huge growth. Between 2012 and 2022, gross sales increased from $28 million to $537 million. The number of stores and counters increased from 52 to 395 as Aēsop expanded its geographic footprint from 8 markets to 29.

More recently, in 2022, Aēsop opened its first physical stores in Mainland China, and significantly grew its fragrance category.

Nicolas Hieronimus, Chief Executive Officer of L'Oréal Group, said: "I am very excited to welcome Aēsop and its teams to the L'Oréal Group family. Aēsop is the epitome of avant-garde beauty, whose products are not only made with great care and exceptional attention to detail; they are a superb combination of urbanity, hedonism and undeniable luxury. Aēsop taps into all of today's ascending currents and L'Oréal will contribute to unleash its massive growth potential, notably in China and Travel retail."

Michael O'Keefe, CEO of Aēsop, added: "This is an exciting day for Aēsop. With the support of Natura &Co, over the past decade, we have built Aēsop into an admirable global force in the luxury beauty space, with a powerful product proposition and a unique customer and retail experience.

"We now enter the next phase of our development and I'm confident that with L'Oréal's partnership we will be able to bring our exceptional skincare products to even more people and continue to expand our brand globally. We thank Natura &Co for its support and are greatly looking forward to working with L'Oréal to continue our development, building on our distinctive brand and heritage."

With the transaction, Natura &Co will strengthen and deleverage its balance sheet, freeing up resources to focus on its strategic priorities, notably the integration in Latin America, as well as the further optimisation of Avon International's footprint and the improvement of The Body Shop´s business.

Last month, Natura &Co reported a net loss of £139 million for the fourth quarter, with lower revenues across Aēsop, Avon and The Body Shop. Consolidated net revenue was £1.6 billion, increasing 3% in constant currency but down 10.8% in local currencies.

Fabio Barbosa, Chief Executive Officer of Natura &Co, concluded: "The divestment of Aēsop marks a new development cycle for Natura &Co. With a strengthened financial structure and a deleveraged balance sheet, Natura &Co, exercising strict financial discipline, will be able to sharpen its focus on its strategic priorities, notably our investment plan in Latin America. We will also be able to concentrate on continuing to improve The Body Shop's business and refocusing Avon International's footprint."

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