French cosmetics company L’Oréal has received fifteen bids for its British chain The Body Shop, for which it hopes to get at least one billion euro. The bidders reportedly include private equity firms like CVC, Carlyle, Advent and Bain Capital.
Industry under pressure
If L’Oréal manages to get a billion euro for The Body Shop, it would get back its initial investment from eleven years ago. However, analysts are not convinced the chain will attract such bids, because the entire cosmetics industry is under pressure.
L’Oréal seems impervious to the industry’s issues, because its first quarter turnover grew 7.5 % to more than seven billion euro. Like-for-like turnover still managed a 4.2 % growth, particularly thanks to excellent performances in the Americas and Eastern Europe. Western European turnover grew 1.6 % (2.8 % on a like-for-like basis), despite weak results in France. The company says it did perform well in the United Kingdom, Germany and Spain.
Turnover from luxury products also grew 17.8 % compared to the previous year, mainly thanks to improved Asian sales. The Body Shop itself had to suffer a 1.4 % turnover drop, but there was a 2.3 % like-for-like turnover increase.