On reporting Lush founder Mark Constantine's claims that L’Oreal wanted to sell the global chain yesterday, a representative for The Body Shop promptly contacted Cosmetics Design to rubbish what it refers to as an ‘incorrect rumour’.
“This rumour has got out of hand, it is not true and various websites have been reporting incorrectly on the matter - L’Oreal has no plans to sell The Body Shop,” Sara Vaughan, PR director for The Body Shop told this publication.
According to Vaughan, information in various reports on the matter have been factually incorrect and not credible.
A story published by Retail Week referring to the chain being in negotiations about a takeover bid is one news source to retract its statement this morning.
Vaughan’s office then declared that the Body Shop’s business has recently been picking up steam, contrary to the 'average performance' Constantine suggested.
Then further pointed to UBS analyst Eva Quiroga’s synopsis of the chain’s progress. “Over the last three quarters, The Body Shop has delivered organic top-line growth of plus 6 per cent, a clear acceleration over the anemic low single-digit growth reported over the preceding years.”
According to Quiroga, this was down to “the work done on product portfolio and stores, coupled with a rapidly growing online presence” and that in the same period, “profitability has been improving with margins now in high-single digits.”
Meanwhile, L’Oréal representatives have also issued a statement denying reports that it is considering selling the natural cosmetics chain.
“There is absolutely no truth in the rumour that L’Oréal intends to sell The Body Shop. In an interview with the Financial Times on September 27, 2012, Jean-Paul Agon, chairman and ceo [of] L’Oréal, explicitly denied any intention to sell and added that ‘The Body Shop is the kind of treasure that we are very happy to have."
Behind the furore
As we reported yesterday, Mark Constantine, founder of The Body Shop’s rival has been causing widespread debate after stating that an inside source told him “the business no longer fitted L’Oreal’s strategy.”
Constantine tried to buy The Body Shop back in 2001, which made this publication question the authenticity of his claims.
Cosmetics Design has yet to hear from Constantine’s office on the truth of the matter.
In 2006, the France based giant acquired The Body Shop, in an effort, it said to break into new ground as the brand-owner of a business revered for its ethical values.
The deal saw L'Oreal pay a total of £652m (€807m) which at the time was said to be worth $1.14 billion for a deal that secured a majority stake.
"A partnership between our companies makes perfect sense," said Sir Lindsay Owen-Jones, then L'Oreal CEO, "Combining 'Oreal's expertise and knowledge of international markets with The Body Shop's distinct culture and values will benefit both companies."