Natura & Co. exploring separation of beauty brands

Brazilian beauty company Natura & Co., which recently sold The Body Shop and Aesop, is mulling a possible separation of Natura &Co Latam and Avon to support the group’s strategy to simplify operations and strengthen brand autonomy.

In a statement to its board of directors, the Brazilian company said a separation of Natura &Co Latam and Avon into two independent, publicly traded beauty companies with unique business plans, independent governance, and management teams would make them “better equipped to pursue more tailored strategies to drive long-term shareholder value”.

Natura & Co. said that a full strategic assessment is being conducted internally and it believes that two standalone entities, which have distinct geographical footprints and serve different beauty consultants and consumers, would “afford shareholders greater visibility into the financial performance, structure, growth prospects, and investment theses of the respective companies”.

Natura would continue to operate with both brands in the region, so the potential separation would not impact the integration of the brands in Latin America. In turn, Avon would indirectly benefit from the sales in Latin America through a commercial arrangement with Natura, while continuing its operations in other markets outside Latin America. Natura & Co. does not own Avon US.

“There can be no assurance that any separation will ultimately be recommended by the board of directors,” Natura said in a statement. “Completion of a separation would be subject to various conditions, including, among others, final approval from the board of directors and consent from the majority of shareholders.”