Christopher Davis, The Body Shop’s head of CSR, talks to Ethical Corporation editor Terry Slavin in the first media interview since the sale by French cosmetics giant L’Oréal
The mood in The Body Shop’s headquarters in Sussex has been jubilant this week in the wake of last week’s completion of the €1bn sale by L’Oréal to Brazil’s Natura Group, according to Christopher Davis, the ethical cosmetic company’s international director of corporate responsibility and campaigns.
In the first interview The Body Shop management has given since the takeover, Davis said staff were buoyed by a sense the brand will be able to return to its activist roots after 10 “challenging” years with the French cosmetics giant.
“I joined under Anita [Roddick] over 14 years ago, and I have seen a lot of changes, but genuinely, I haven’t seen or felt the place generating that amount of joy and excitement as today. It feels great,” said Davis.
Davis said fitting into the more corporatist culture of its erstwhile parent, which bought The Body Shop from founders Anita Roddick and husband Gordon in 2006, had been “a strain on many people in The Body Shop … The Body Shop over the past 10 years hasn’t had the freedom to express what is still alive in the Body Shop, the human activist spirit and purpose-led philosophy.”
Natura’s board, in contrast, “are talking about shared purpose; they’re talking about a shared vision and shared culture. The depth of the change we are going to experience here [with Natura] seems so right and so close to The Body Shop’s DNA.”
He said the staff are now optimistic that it can achieve what it set out when it launched the Enrich Not Exploit two years ago, and become the world’s most ethical and truly sustainable company. The strategy sets 14 targets for 2020, including doubling its community-traded natural ingredients from 19 to 40 and powering all its stores with renewable or carbon-balanced energy. In a progress report this summer Davis said the company was making good progress, but is behind schedule on cutting its carbon footprint.
For The Body Shop to thrive, we need to take a long-term approach ensuring sustainable growth on every level. We are now in a home where we can prosper again
Natura, a Brazilian cosmetics and personal care giant operating in the US, Latin America and France, was the first publicly traded company in the world to receive a B Corp certification in December of 2014. It also owns Australia’s Aesop ethical beauty brand, acquired in 2013, and ranks 19th in Corporate Knights Global 100 sustainability rankings (well ahead of L’Oréal at 38th).
In its press release last week announcing the completion of the tie-up, Natura emphasised how The Body Shop’s ethical approach fit with its existing brands. “All three companies are committed to generating positive economic, social and environmental impact through such actions as developing vegetable-based products, using traceable and sustainably-sourced ingredients, promoting fair trade with suppliers and rejecting animal testing.”
The Body Shop’s CEO Jeremy Swartz will go, with a new CEO to be announced next month.
When L’Oreal said in February it was looking to find a new buyer, it cited poor performance by The Body Shop, which saw a 5% drop in sales in 2016. And in its press release last week Natura said it intended to double The Body Shop’s 2016 earnings before interest, taxes, depreciation and amortisation (EBITDA) of $82m by 2022, and increase its EBITDA margins from 8.4% to 12%-14%.
Davis accepted that The Body Shop’s financial performance had suffered under L’Oréal, “But what we are seeing from Natura is a commitment to focus on long-term growth.” Even companies like L’Oréal, which are strongly committed to sustainability, are under enormous pressure to deliver short termism when they are publicly traded, he said.
“Our sense is for The Body Shop to thrive, we need to take a long-term approach … ensuring sustainable growth on every level. We are now in a home where we can prosper again”
Natura was the first publicly traded company in the world to receive a B Corp certification
One of the most exciting things about Natura, he said, is its commitment to triple bottom line accounting, valuing social and environmental progress as well as financial metrics. “Our commitment to Enrich not Exploit, and our ongoing work with the Future-Fit Foundation fits very well into that.”
As Ethical Corporation has previously reported, L’Oréal did well out of its acquisition of The Body Shop, mining it for its expertise in raw materials sourcing and cruelty-free ingredients. The company poached Mark Davis, who was in charge of sourcing raw materials for The Body Shop, to head up raw material innovation for the entire group. In 2011 he came back to The Body Shop, but continued to feed his expertise into the group's brands.
Asked what The Body Shop gained in return, Christopher Davis said: "The Body Shop learned a lot about product development from L’Oreal, allowing it to grow into a global leader in cruelty-free high-quality skin scare. And L'Oreal did give the company some space to express its activism: “It’s easy to forget that the biggest campaign The Body Shop ever ran [a three-year campaign to stop sex trafficking of children launched in 2009], was under the auspices of L’Oréal.”
But he expected Natura would give The Body Shop a freer hand to forge partnerships with the likes of Amnesty International and Greenpeace, as it had prior to the L’Oréal takeover.
Peter Saunders, who was CEO of the company when it was taken over by L’Oréal, will join the Natura board as a new independent director
There is another development that promises a return to The Body Shop’s previous form. In the press release last week Natura announced that Peter Saunders, who was CEO of the company when it was taken over by L’Oréal, will join the Natura board as a new independent director, subject to shareholder approval.
Patrick Ballin, an executive coaching consultant and former head of supply chain development at The Body Shop, said the appointment bodes well. “Peter is a strong, experienced and internationally astute retail operator and understands the brand. Before being overall CEO, he ran The Body Shop US business for a few years, under the tutelage of Adrian Bellamy (now non exec chair at Reckitt Benckiser),” Ballin said.
“With Adrian as chair and Peter as CEO of The Body Shop, the share price went from a low of 56.5p in 2003 to 300p at the time of the sale. They turned the business round and made it ready for the Roddicks to sell. He is tough and demanding but also has a sound understanding of the brand and front line retailing.”
Next week The Body Shop's managers will make their first trip to Natura's Sao Paulo headquarters to spend time with their opposite numbers in Brazil, Davis said. "We will start to work on a detailed plan on how we can thrive" in the new group. "There's so much that The Body Shop and Natura can both learn from eachother. It's breathlessly exciting."
Mark Davis, international sourcing director at the Body Shop, will be speaking next month at our Responsible Supply Chain Summit. Mark will be joining 200+ leading sustainability and supply chain executives at the Summit, sharing how Body Shop aligns sustainability, supply chain and commercial objectives. For more information visit hereThe Body Shop Natura skincare L'Oreal cruelty-free cosmetics B corp community trade