L'Occitane closed 39 Brazil stores as au Brésil kept bleeding money

L'Occitane au Brésil — a Brazil-only brand created in 2013 to be more accessible to local consumers and compete head-on with Natura and O Boticário — closed 39 stores in 2020, about 20 per cent of the brand's Brazilian base and 12 per cent of the group's total points of sale in the country. Group CEO Reinold Geiger had told analysts in November 2020 that the Brazilian operation was one of the biggest money-losers in the world for the group, and that it would take two years to put the business back in the black.

The numbers behind the retreat: from March to December 2020, L'Occitane's net sales in Brazil fell 43 per cent to €27.4 million — a 20 per cent drop in local currency, the second-steepest among the nine countries in the group's sales report — and Brazil's share of group sales fell from 3.7 per cent to 2.3 per cent. Geiger did not spare the pandemic, but dated the problem earlier: the internal study for the Brazilian downsizing began at the end of 2019, part of a global restructuring of loss-making businesses in which he also named LimeLife.

Consultants told Valor the structural problem: Natura, Avon and Boticário have wider distribution networks, agile low-cost production and stronger local images, while L'Occitane depended more on shopping malls — a disastrous channel in 2020 — and had a weaker digital operation. A mid-2020 price cut of 10-30 per cent on basic lines to win scale didn't turn the tide. The group said e-commerce grew 139 per cent the past fiscal year and pledged 12 new au Brésil stores in 2021.

The brand was created to compete directly with Brazil's direct-selling giants, whose distribution scale and low-cost production L'Occitane could not match.

L'Occitane au Brésil was far more dependent on shopping-centre retail than its local rivals, just as malls went dark in 2020.

Cutting prices 10-30 per cent on basic lines to chase scale eroded margin without overcoming Natura and Boticário's brand strength and biodiversity image.

The study that led to the closures began before the pandemic — the losses were structural, not just a Covid effect.

A down-market flanker built to fight local champions inherits their strengths, not yours: without their scale and direct-selling muscle, accessibility branding alone doesn't close the gap.

Geiger said the group expected Brazil to return to positive group-wide contribution in 2021, with au Brésil targeted for profitability in fiscal 2023, and the group's focus shifting to France, Japan and China. The brand claimed an expansion plan was still running, with a new store at Iguatemi Alphaville due in May 2021 and 12 more openings planned, plus a first Brazilian spa. In the same restructuring window, L'Occitane's US subsidiary filed Chapter 11 with US$160 million in debts and 23 store closures.