Brazil-based cosmetic company Natura &Co has agreed to divest The Body Shop to investment firm Aurelius in a deal valued at £207m ($254.32m).

The move is part of Natura’s strategy to simplify and refocus its operations.

Natura, which acquired The Body Shop in 2017, started exploring strategic alternatives, including the possible sale of the business in August 2023.

Headquartered in London, The Body Shop offers natural ingredient-based bath and body products, fragrances, skincare, make-up, hair care and gifts.

It also has e-commerce sites and wholesale customers.

With the market remaining challenging, the UK retailer has been witnessing reductions in footfall and traffic across its global footprint.

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In the third quarter of 2023, The Body Shop’s net revenue was $169.74m, down 13.2% in constant currency.

Its combined sales of core business distribution channels, including stores, e-commerce and franchises, showed a high-single-digit decline.

During the quarter, The Body Shop showed a profitability improvement of 140 basis points compared to the same period last year.

At the end of the third quarter, the B-Corp-certified omnichannel beauty retailer operated a network of 922 company-owned stores and 1,410 franchised stores across the world.

Natura chief executive officer Fabio Barbosa said: “With the sale of The Body Shop, we are taking another important step in Natura &Co’s new development cycle to unlock significant value.

“Refocused, deleveraged and leaner, Natura &Co will now be able to fully concentrate on its core relationship selling expertise in Latin America while also continuing the optimization of Avon International’s footprint and investing in initiatives and innovations that positively impact people and the planet.

“We are pleased to have found a strong home for The Body Shop to write the next chapter in its remarkable story and we extend our sincerest thanks to all The Body Shop’s associates, who contributed immensely to broadening Natura &Co’s horizons. We wish them continued success under the stewardship of Aurelius.”

The transaction is subject to approval by the relevant competition and regulatory authorities and is expected to be completed by next month.