Sales: $7.0 billion

Comments: Sales fell 9.5% due to forex woes. At constant currency, net revenue was up slightly, 0.4%. The company posted a net loss of about $563 million, which Natura blamed on restructuring costs and higher operating expenses. By division, sales within Natura &Co Latin America fell 1.7%, which the company blamed on unfavorable exchange rates. Still, the Natura brand performed well and Avon showed improvement in the CFT category (sales continued to fall within the fashion business). Natura sales benefitted from the launch of new Chronos formulas and the increased use of bioactives in the Ekos line. Consumers snapped up Kaiak Oceano, drawn to the product packaging’s environmental story—half of all the plastic used is recycled.

Avon International’s revenue dropped nearly 30%. Natura said it was the business unit most impacted by the Russia-Ukraine war, and also faced a challenging global macro environment (particularly in Western Europe) as well as the planned decrease in the number of representatives as the new commercial model is implemented. One bright spot is Anew Renewal Power Serum with Protinol, which Natura insists helps restore years of collagen loss in seven days.

The Body Shop is especially exposed to Western Europe, where core distribution channels faced headwinds. Sales fell 24.3%. The Body Shop at Home channel, which had benefitted during covid, returned to more normalized pre-pandemic levels as the economy reopened. The business has benefitted from the rollout of its Changemaking Workshop concept stores, which posted sales 15% higher than other Body Shop stores.

Aesop has another stellar year, with sales up 4.6% and 21.0% in constant currency. Last year, Aesop launched Exalted Eye Serum as part of the Skincare Plus+ range. The serum is billed as the brand’s most advanced eye treatment.

Aesop continued to experiment in retail with pilot travel retail spaces in Europe, an expanded treatment experience in the new Regent Street store in London, and the continued rollout of elevated fragrance spaces, including armoires and a dedicated “sensorium” in Shanghai. At the same time, Aesop trialed a circularity program in key stores in Australia and launched its first Sustainable Concept Store in the SeongSu district in Seoul, Korea.

As part of its effort to decentralize its business model, Natura appointed Fábio Barbosa as CEO of the group. Barbosa served on the Natura board since 2015.

For Q1, sales fell 2.8%. Gains by Natura &Co Latam and Aesop were offset by declines within The Body Shop and Avon International.

Just after the close of Q1, Natura agreed to sell Aesop to L’Oréal for $2.5 billion.

The Body Shop and the Office of the United Nations Secretary-General’s Envoy on Youth joined with youth activists and ministers from around the world in April at the ECOSOC Youth Forum at UN Headquarters in New York to promote youth engagement in politics and public life.

Sales: $7.4 billion

Sales rose 8.8% last year. Natura &Co calls itself the world’s largest B Corp. The company operates in more than 100 countries, and has 35,000 employees and 7.7 million representatives. More than half of group revenue came from digitally-enabled sales last year. Direct selling accounted for 74.8% of sales, followed by retail (14.5%) and online (10.7%). Its goal is to get digitally-enabled sales to account for 75% of revenue.

Sales of Natura &Co Latin America rose 6.3%, driven by a 22% gain in Hispanic Latin America. The unit posted good gains in Argentina, Chile, Peru and Mexico, which became Natura’s biggest market trailing only Brazil.

Integration of Avon International is ahead of schedule and the company said the business “revenue trend” was improving compared to the previous three years. The business is centered on the key markets of Italy, Philippines, Poland, Romania, South Africa, Turkey, the UK and China. Elsewhere, Avon’s new commercial model is rolling out to 12 markets. To make Avon operations run more smoothly, campaign cycles in all markets were reduced to 12 and the product portfolio was cut by 20%.

The Body Shop set a sales record, even as the Omicron variant impacted in-store sales. Sales were up, in part, due to the success of The Body Shop at Home, the division’s direct sales channel. In just two years, sales tripled. This year, The Body Shop is focused on expanding in Japan.

Aesop’s sales continued to surge, growing 25.1% thanks to demand in North America and Asia. The company said sales jumped 50% in South Korea. Elsewhere, by the end of 2021, Aesop had added 25 stores and nine department store counters around the world. This year, both Aesop and The Body Shop will debut in the all-important China market.

Last year, Natura &Co launched Fable Investments to support innovative indie beauty companies. By the end of 2021, four companies received support, including:

• Perfumer H, a British artisan fragrance brand with stores in London and Paris;
• Maude, a sexual wellness company;
• Loli, an organic, zero-waste beauty brand; and
• Stratia, a science-based skin care brand.

In environmental news, last year, Natura &Co launched Our Commitment to Life, a program to address urgent and pressing issues such as Amazon deforestation.

In Q1 2022, sales fell 12.7% due, in part, to currency fluctuations, and to strong comps, when sales rose 25.8%. More than 45% of revenue came from outside Latin America. By division, Natura &Co’s sales fell 8.4%, Avon International sales fell 22.1% and The Body Shop’s sales fell 22.9%. In contrast, sales of Aesop rose 9.6% on the strength of results in North America and Asia-Pacific.

Sales: $7.2 billion

Beijo Humor fragrance.

Last year was expected to be arduous for Natura &Co even before the pandemic hit. That’s because it was set to integrate Avon International, which it acquired in May 2020. Despite a significant devaluation of the Brazilian real, Natura still expects to achieve recurring annual synergies of $300-400 million. Natura insists that it is on track to create a common culture for all of its brands. It starts with Latin America, where it has created a fully integrated business unit comprising all four brands. Now, Natura is rebuilding Avon, relaunching the brand and implementing a new business model to create sustainable and profitable earnings opportunities for its representatives.

Despite all the changes, corporate sales still rose 12% in 2020. The company attributed the growth, in large part, to e-commerce, which led to a 107% increase in social selling and e-commerce sales across the group. By segment, Natura &Co Latin America reported a 9.4% sales increase; Avon’s sales rose 2.9%, The Body Shop’s sales increased 32.4% and Aesop’s revenue rose 50%.

Last year, Natura’s number of consultants reached 2.1 million, up from 1.9 million the previous year. The adoption of digital tools led to 17 consecutive quarters of productivity growth. At the retail level, Natura opened a new concept store in São Paulo, and optimized its presence in Paris and New York. The most important opening, however, came in Kuala Lumpur, Malaysia. Here, Natura leveraged its learnings from The Body Shop, paving the way for international expansion of Natura’s omnichannel capabilities.

Avon is returning to growth via Open Up & Grow. This three-year strategy is designed to optimize the business model, expand digitally and advocate women’s empowerment and beauty democracy, according to Natura &Co.

The Body Shop was midway through its five-year restructuring plan when the pandemic hit. With 90% of stores closed, TBS pivoted to ecommerce and direct sales. At the same time, the brand is committed to its traditional activist retail roots. New concept stores were opened in London, Vancouver, Hong Kong, Melbourne and Seoul. This year, TBS plans to add 100 of these stores around the world.

Aesop is the smallest business within Natura &Co., but it is the fastest growing. Online sales surged 250% and moved from 12% of sales in 2019 to 30% in 2020. Still, Aesop opend nine new stores and refurbished seven others in Japan, the UK, Singapore, Taiwan, Australia, the US and Canada.

Natura &Co describes itself as a group of purpose-driven beauty brands with “a direct-to-consumer reach like no other.” Each brand has its own position. Natura promotes “wellbeing, harmony and a deep connection with the rhythm of nature.” Avon about on-trend, innovative, democratic and affordable beauty. The Body Shop smashes taboos and promotes a joyful energy and a change-maker attitude to life. Finally, Aesop is an invitation to a pleasurable, sensorial journey through meticulous and well-considered design, according to the company. All four brands are planning to enter China soon.

For Q1, 2021, sales rose 25.8%. By segment, Aesop’s sales rose nearly 72%. The Body Shop’s sales rose almost 48%, Natura’s sales rose 24.6% and even Avon’s sales increased 11.4% in local currency. Net losses declined more than 70%. By segment, Natura &Co accounted for 55% of revenue, followed by Avon (25%), The Body Shop (14%) and Aesop (6%). Natura’s sales rose on the strength of nearly 13% growth in Brazil and 61% gains in Hispanic Latam. Avon’s sales rose thanks to good results in Western Europe and Asia Pacific. Body Shop’s sales were driven by the UK and North America. Finally, Aesop’s Q1 revenue was up due to growth in the Americas and Asia.

Sales: $3.6 billion

In May, Natura &Co acquired Avon in a deal that it maintains creates the fourth largest beauty company in the world. Avon joined a group that includes Natura, The Body Shop and Aesop. Together, they reach more than 200 million consumers worldwide through multiple channels. The group will have annual sales of $10 billion, 6.3 million representatives and consultants, 3,200 stores and a presence in more than 100 countries, according to Natura.

Under the terms of the agreement, Natura holds 76% of the combined business. Natura already controls 31% of the Brazilian cosmetics market; prior to the acquisition, Avon held a 16% share. Natura said the deal could result in as much as $250 million in annual savings. Maybe, but it’s probably more important for Avon to get growing again.

Last year, corporate sales fell 15%. By region, sales in Europe, Africa and the Middle East fell 14% to less than $1.79 billion. The company blamed the decline primarily on lower sales in Russia (-17%) and the UK (-16%). Sales in South Latin America fell 18%, due to lower sales in Brazil (-18%) and Argentina (-23%). Sales in North America, primarily Mexico, fell 7% to $751 million. Sales in Asia Pacific also dropped 7% to about $437 million.

This year, Avon launched Anew Skin Reset Plumping Shots. The formula contains something called Protinol, which is said to restore both types of collagen found in healthy skin, helping to mimic the collagen equilibrium found in baby skin, according to Avon. Used over seven days, these single-use shots are said to have the maximum concentration of the patented Protinol technology to restore seven years of collagen loss in just seven days.

In May, Avon joined the fight against COVID-19 by mobilizing its research and development, sourcing and supply chain networks to expedite hand sanitizer production. The company is producing more than 3 million units to distribute around the world.

Sales: $3.6 billion.

Natura is getting bigger—much bigger. In May, the largest cosmetics maker in Brazil agreed to acquire Avon in a stock swap to create what it calls the fourth-largest pure-play beauty group in the world. According to Natura, the acquisition creates a best-in-class multi-brand and multi-channel beauty group, with direct connections to consumers on a daily basis. The group will hold leading positions in relationship selling through Avon´s and Natura’s over 6.3 million consultants and representatives, a global footprint through 3,200 stores, as well as an expanded digital presence across all companies. The combined group is expected to have annual gross revenues of over $10 billion, over 40,000 associates and be present in 100 countries.

As part of this transaction, a new Brazilian holding company, Natura Holding S.A., has been created. Based upon the fixed exchange ratio of 0.300 Natura Holding shares for each share of Avon common stock, Natura & Co’s shareholders will own approximately 76% of the combined company, while Avon common shareholders will own approximately 24%.

Upon closing, the board of the combined company will consist of 13 members, three of which will be designated by Avon. The transaction is subject to customary closing conditions, but is expected in early 2020.

At the end of 2018, Natura had more than 1 million consultants in Brazil. Its productivity rose 18% in one year, and the average remuneration jumped 12%; for business leaders (consultants that guide a group of colleagues), it rose 25%. During the year, Natura won market share, brand preference and recorded an increase in sales in all countries of Latin America, where it operates. The highlight was Argentina where, despite the challenging macroeconomic scenario, the company exceeded the overall performance of the local market thanks to the network of consultants and operational efficiency. The total number of consultants rose from 589,000 to 645,000 and grew in all the countries except in Chile, where the numbers were flat.

In other news, Natura became one of the first companies in the world to receive the new international certification of the Union for Ethical Bio Trade in June 2018. The seal appears on Natura Ekos packaging and confirms that all vegetable ingredients follow ethical practices such as fair sharing of benefits through the use of biodiversity and traditional knowledge, respect for labor conditions, income generation, local development and maintenance of ecosystems.

Natura’s move to digital continues. At the close of 2018, nearly 660,000 consultants relied on web and mobile apps in Brazil and Latin American. More than 2.5 million online trainings were performed in 2018, an increase of 40% compared to 2017. One of the biggest news items of the year was the debut of Nat, the virtual assistant in the Natura portal. Through artificial intelligence, Nat helps consultants solve issues related to registration, credit and charging. According to Natura, 60% of issues are resolved without human interaction.

Last year, Rede Natura (Natura Network), the online sales platform, was named the best e-commerce site in Brazil by Ebit, a company that measures the reputation of virtual stores. Moreover, it was recognized for the third consecutive time, as “the most beloved internet store” in the cosmetic and perfumery categories. Rede Natura has 400,000 digital consultants, who sell on the platform using their own pages, and 5 million registered customers. The network topped sales targets by 40%, and at the close of the year. Nat was available in Chile and Argentina, with implementation started in Colombia, Mexico and Peru.

Also in 2018, The Body Shop made history when, on October 4, World Animal Day, The Body Shop and Cruelty Free International went to the UN headquarters in New York, with 8.3 million signatures calling for an end to animal testing in cosmetics. It was the largest petition ever made against the use of animal tests in the cosmetics industry. In other news, The Body Shop’s social media community nearly doubled last year to seven million followers.

Aesop continues to expand around the world. Last year, the Australian-based brand opened its first counter in GUM, the world-famous Moscow department store. Online, Aesop launched in Australia and Canada a live site assistance tool which generated approximately 3,000 interactions and 632 hours of conversation. In Australia and New Zealand, Aesop launched CEGID, a new system to enhance customer experience and inventory management. Finally, Hybris, another e-commerce platform, was launched in more than eight countries.

Sales: $2.5 billion

Natura doesn’t have to go it alone anymore. Following its recent acquisitions of Aesop (2013) and The Body Shop (2017), the company has a new corporate identity for a new multibrand group—Natura & Co. According to company executives, the three distinct businesses share a common vision: “We are committed to generating positive economic, social and environmental impact, delivering value in all business brands and geographies.”

Just don’t call Natura & Co a holding company.

“(We are) not building a holding company,” explained executive chairman Roberto Marques, “(but rather) a thin, leaner corporate organization.”

Natura & Co. is an organization that maintains all three of its distinct brands while delivering a message of sustainability and being a force for good—and a force outside Brazil. Since its founding in 1969, the overwhelming majority of Natura’s sales have come from its home country. But now, thanks to The Body Shop acquisition late last year, Natura & Co. will generate 54% of sales in international markets, primarily Latin America, the UK and US. Down the road, the company will consider expansion into Asia, specifically Indonesia and the Middle East.
“One of the reasons for bringing in The Body Shop, as well as acquiring Aesop, was to create a more global footprint for Natura as a group, while also creating the possibility for Natura to expand globally with the aspiration of getting into 60 markets,” Marques told The Financial Times.

In December, David Boynton, a veteran of L‘Occitane Groupe, took the reins as chief executive of The Body Shop, replacing Jeremy Schwartz.
Four drivers will create growth for Natura & Co., insist executives.

• Multibrand model;
• Leveraging group scale;
• Multichannel growth in multiple geographies; and
• Innovation and sustainability.

For example, just five years ago, the company derived all of its revenue from a direct selling model. But by the end of 2017, just 64% of sales came from direct sales. Retail accounted for 23%, followed by franchise (7%), e-commerce (4%) and wholesale (2%). Using that time frame, Natura has expanded its global footprint from seven to 72 countries and can offer complementary and innovative products across a range of categories. For example, Natura & Co. now derives 29% of sales from body care, followed by fragrance (25%), gifts (18%), skin care (9%), makeup (8%), hair care (7%) and other (4%).

Company executives like to talk about the “2 x 20 x 200” opportunity; that is, 2 million connected consultants; 20 million LATAM consumers and 200 million consumers connected to the worldwide Natura ecosystem. If the company can make good on its plan to rejuvenate The Body Shop, Natura & Co. could become the pre-eminent beauty company among environmentally-conscious Millennials.