A Chinese healthcare company has been named as a potential buyer of the underperforming The Body Shop retail business.
French parent L’Oreal put the 3000-store strong international chain on the market early this year. Investment bank Goldman Sachs has already been linked to a Body Shop bid.
Now Sky News in the UK has identified Renhe Pharmacy Co as a potential buyer for the business, thought to be priced at around £600 million.
Private equity companies CVC Capital Partners (which recently acquired the Formula One business) and Italy’s Investindustrial (which owns Aston Martin) have also been named as participating in the auction. Advent International and Apax Partners had shown interest but it is not clear if they will participate in the bidding process.
L’Oreal paid founder, the late Anita Roddick, £650 million for the Body Shop in 2006 and may well take a loss on the sale given its declining sales since then. L’Oreal had earlier been seeking £850 million, but declining profits have lowered the Body Shop’s value.
Investment bank Goldman Sachs is reportedly preparing a £600 million bid for The Body Shop, probably on behalf of a third party.
Charlotte Pearce, an analyst with GlobalData, warns The Body Shop needs to freshen its offer or face its eventual demise.
“The brand has become outdated and has failed to provide an innovative offer with exciting new products to entice customers into stores, causing the retailer to lose out to brands with more relevant beauty and skincare ranges,” Pearce wrote in a column published by Inside Retail Asia in February.
