Body Shop’s parent company L’Oreal hopes to sell it for €800m but is reportedly forecasting a slump in the ethical retailer’s upcoming profits.
According to Sky News sources, L’Oreal have informed bidders that the Body Shop’s EBITDA is expected to slide 18% year-on-year to €65m (£56m) in 2017.
The same sources say L’Oreal’s management team met this week to assess offers from a variety of bidders including CVC Capital, Investindustrial and Chinese conglomerate Fosun, with two bidders expected to make it through to the final round.
However, given that the Body Shop’s EBITDA for this year is likely to be half of the 2013 figure of €113m (£98m), one financial expert is quoted as saying that L’Oreal’s hopes of a €800m (£695m) sale of the retailer was “unrealistic.”
These expected results come after a 38% drop in full-year profits in February, during which period sales also declined 4.8%.
L’Oreal, which has owned the Body Shop since 2006, confirmed its sales of the business following its latest full-year results and has since attracted interested from a slew of private equity bidders.