Private equity bidders in the running to buy The Body Shop are being put off by its Brazilian owner Natura’s high valuation on any potential sale, Retail Week can reveal.

The Body Shop store exterior

The Body Shop recently reported an fall in net sales

As Retail Week first reported, cosmetic giant Natura & Co is holding out for between £400m and £500m for the UK-based ethical health and beauty chain.

One source with an understanding of negotiations described this as a “very optimistic” price for the struggling retailer. 

They added: “The price of £400m to £500m is very optimistic given the business is going through a lot of transformation and is in need of major operational improvements. 

“If you compare the mobile website of The Body Shop with competitors like Lush or L’Occitane, it’s prehistoric. It’s a clear example of the basic improvements that the company needs and the tasks any new buyer will have to take on.” 

The Body Shop recently reported an 11.6% fall in gross profit and a 12.5% dip in net sales in constant currency terms for the second quarter of 2023. 

Natura paid €1bn for the Body Shop when it acquired the chain from L’Oreal in 2017. In August 2023, Natura announced it was “exploring strategic alternatives” for the health and beauty retailer including a possible sale of the business.

Retail Week understands private equity firms such as Waterstones owner Elliot Advisers, Epiris, Alteri Investors and Lloyds Pharmacy owner Aurelius Group are all in the running for the business.

The source described Natura as “highly motivated” to finalise a sale and expected completion of the handover to the new buyer by the end of the year. 

Natura &Co declined to comment.