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What should we make of the receivers being called in for The Body Shop in the UK? Its new private equity owners, Aurelius, acquired the retailer in November from previous owners, Natura, for £207 million. Natura had bought it themselves from L’Oreal for £880 million in 2017, 11 years after founder Anita Roddick sold it to them for £650 million.
So what to make of all this changing of hands and valuations?
The first point to note is that sustainability is not a free pass for poor commercial performance. It’s a necessary part of business strategy – not least with the CSRD now making it mandatory for all EU companies (and qualifying EU subsidiaries of non-EU firms) to report on the environmental and social impacts of their business activities – but it doesn’t guarantee strong performance or returns to investors. Companies have to invest in sustainability and need to get a return on that investment. Which means integrating sustainability fully into business strategy, not just using it as a story for reporting or marketing.
The second point is that sustainability is now everywhere – every analyst meeting, every news report, every marketing awards ceremony, and seemingly every LinkedIn profile. When the first Body Shop opened in Brighton in 1976, it was a trailblazer, selling products made with ingredients that were ‘ethically sourced, cruelty free and natural’.
Some of these are now required by legislation, others by societal expectation, and that’s part of The Body Shop’s legacy. Also part of that legacy is the abundance of other climate and ethically focused brands competing where The Body Shop once had a free run.
Sustainability is fast becoming a necessary condition for success, but not a sufficient one. The winners – and let’s hope the smart people at Aurelius see a future for a brand they’ve spent £200 million on – will be those who understand the role sustainability has to play in business. The Body Shop was a visionary in the ‘why’ stage of sustainability. We’re now at the ‘how’ stage.
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