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UK: Body Shop Acquisition Opens up Market
Opportunities
The acquisition of
The Body Shop by L’Oreal is likely to open up opportunities for natural
& organic personal care product companies.
L’Oreal has agreed to purchase the British retail chain of natural-based
cosmetics for GB £652 million (EUR 945 million). The French cosmetics
giant owns a plethora of brands that include Lancome,
Garnier and Maybelline. It reported US $2.35 billion profits from US $17.3 billion
sales in 2005.
Formed in 1976 as a single retailer in
Brighton, The Body Shop has grown to become an international chain
of over 2,000 shops in 53 countries. The Body Shop brand is based on a
highly ethical approach to business. Its products are made from natural
ingredients and are not tested on animals. The company has invested in
third world community projects and has had close ties with NGOs like
Greenpeace and Amnesty International.
Some regard
the decision of The Body Shop as a sell-out. Anita Roddick, the founder
of the British firm, often spoke out against large multinationals,
trumpeting fair trade over profits. A few years ago, L’Oreal was
criticised by the company founder for its sales tactics. Although The
Body Shop will remain an independent outfit and continue to champion
environmental & ethical causes, its business ethos could erode as it becomes part of
the L’Oreal empire.
The Body Shop’s take-over
presents opportunities to natural & organic
personal care product companies. The Body Shop has been the major
competitor to retailers and producers of these products with many
consumers mistaking The Body Shop products as natural & organic.
Although they are made from natural ingredients, they contain synthetic
preservatives and chemicals that are not found in
most natural & organic
personal care products.
Producers and retailers of natural & organic products
are now in a stronger position to compete against The Body Shop.
Some consumers will switch to natural &
organic personal care products because of ethical
reasons. Others will opt for natural & organic
products as they scrutinise the ingredient composition.
Brands like Dr. Hauschka and Weleda are
already highlighting the quality and traceability of their ingredients
in marketing
campaigns.
Neal’s Yard
Remedies, the leading British brand of organic personal care products,
is the most likely to capitalise on The Body Shop’s
buy-out. Like The
Body Shop, it has its own chain of retailers. The shops encourage
consumers to recycle packaging and they run natural medicine,
aromatherapy, and nutrition courses. The company was
bought by a private investor in December 2005; with renewed investment, Neal’s Yard Remedies could emerge as the
natural alternative
to The Body Shop.
Related Reports:
#1201-60 The
UK Market for Natural & Organic Personal Care Products
#1301-60
The French Market for
Natural Cosmetics
Posted: March 20th 2006
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