The encyclopedia · Strategy & Leadership · Strategic decision · 1969–2025
Natura&Co, Brazil's beauty giant, went from global #4 to retreating after buying Avon
Natura&Co became the world's 4th largest beauty group by acquiring Avon for $2B, then sold Aesop, The Body Shop at a loss, and Avon International for £1.
Natura & Co · 2025-09
What happened
Natura was founded in 1969 by Antônio Luiz Seabra in São Paulo, Brazil, and grew to dominate the Brazilian cosmetics market through direct sales. In the 2010s it pursued an ambitious global expansion, acquiring Australian luxury skincare brand Aesop in 2012, British chain The Body Shop for €1 billion in 2017, and American direct-sales giant Avon for $2 billion in 2020.
The acquisitions made Natura&Co the fourth-largest pure-play beauty company in the world, with over $10 billion in annual revenue across more than 100 countries. But the Avon deal loaded the group with debt, and integrating four very different brands across multiple geographies proved far more expensive and complex than expected.
By 2023 the group was forced to sell its most valuable asset, Aesop, to L'Oréal for $2.5 billion. The Body Shop was sold the same year for just $254 million — a fraction of the €1 billion paid six years earlier. In September 2025, Natura sold Avon International for £1, keeping only its Latin American operations. Investors welcomed the retreat, sending the stock up 15% on the announcement.
Why it happened
- The Avon acquisition added $2 billion in debt to a group already stretched by the Body Shop and Aesop purchases — the combined debt became unsustainable when integration costs exceeded expectations.
- Managing four distinct brands across 100+ countries created a complex, costly structure that consumed cash without delivering the synergies the M&A strategy had promised.
- The Body Shop was bought at the peak of its valuation (€1 billion) and sold six years later for $254 million — a loss of over 75% that drained the group's resources.
- Avon's business outside Latin America was structurally unprofitable and declining — Natura had no realistic plan to turn it around and eventually sold it for a nominal £1.
The lesson
Buying your way to global scale works only if you can integrate. Natura acquired four brands it could not run together, and the debt forced it to sell the best ones at a loss.
Sources
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