Feb 16, 2015
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L'Oréal reorganizes The Body Shop

Feb 16, 2015

The cosmetics group L'Oréal has reorganized its retail chain The Body Shop, acquiring its Australia franchise business and restructuring its US operations, it announced on Friday.

"The brand is redefining its strategy in terms of products, points of sale, and communication services," said CEO Jean-Paul Agon during the presentation of the group’s annual results. 

The brand has focused on natural products since its founding

In 2014, The Body Shop’s operating profitability fell to 7.5% of total sales (as compared to 8.6% a year earlier). 

"The Body Shop will undergo significant changes in 2015" including "an acceleration of store modernization, the takeover of one of our major franchises—that in Australia—and a major overhaul of our product range," said CFO Christian Mulliez. 

The program also includes "a reorganization in the US with the closure of the company’s distribution center, the relocation of the headquarters and the closure of a number of low potential stores," he added. 

In this context, the profitability of The Body Shop "will not improve in 2015," indicated Mulliez. 

"We believe in the future of the brand, which meets the aspirations of consumers throughout the world and which complements L'Oréal's other brands," said Agon, in reference to its focus on natural beauty products. 

In 2014, The Body Shop recorded a turnover of 873.8 million euros, representing a little less than 4% of the group’s total. Its growth was 1.6% like-for-like, with a fourth quarter increase of 6%.

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