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JOURNEY · DETAIL
Natura &Co: A Thirty-Year Cycle from Brazilian Direct-Selling Beauty to Global M&A Expansion and Back to Latin American Focus
Founded: Luiz Seabra, Guilherme Leal, Pedro Passos · Natura &Co Holding S.A.
JOURNEY
Key Fields
FIELD STAMPSIndustryMarketing / Advertising
RegionMulti-region
ScaleGiant
ChannelOther
Origin
In 1969, Luiz Seabra founded Natura in São Paulo, Brazil, driven by the potential of the rapidly growing cosmetics market. However, retail channels were dominated by international brands, and local players lacked distribution networks. Seabra opted for a direct-selling model—delivering products directly to consumers via sales consultants, bypassing traditional retail shelves. This model thrived in Brazil's environment of high wealth inequality and weak retail infrastructure, and by the 1970s, Natura had become Brazil's largest cosmetics direct-selling company. In the 1990s, the three founders collaborated to professionalize and internationalize the company, leading to its IPO on the São Paulo Stock Exchange in 2004.
Milestones
1969
Founding and Startup PMF
In 1969, Luiz Seabra founded Natura in São Paulo, starting as a small cosmetics laboratory with a direct-selling team. He entered the Brazilian middle-class market through 'relationship selling,' where consultants visited homes to demonstrate products and build long-term trust—a model that resonated with Brazilian social culture. By the late 1970s, Natura had thousands of consultants and became the leader in Brazil's local beauty direct-selling sector, successfully avoiding the department store channels dominated by international brands.
2004
IPO and Expansion Growth
In 2004, Natura went public on the São Paulo Stock Exchange, using the proceeds to expand production capacity and R&D. Post-IPO, the group accelerated its international footprint, entering Latin American markets like Argentina and Mexico in 2005, and testing the European market with a flagship store in Paris in 2007. In 2012, Natura acquired a majority stake in the Australian brand Aesop (fully acquired in 2014), beginning the construction of a multi-brand portfolio. By 2016, Natura &Co (the holding company established in 2014) had net revenue of approximately 20 billion RMB, with a direct-selling network covering over 1 million consultants in Brazil.
2017
M&A Peak Turning Point
In 2017, Natura &Co acquired The Body Shop from L'Oréal for approximately 1.1 billion euros, marking the first time a Brazilian company acquired a global beauty chain. The deal brought the group's global store count to over 3,000 and propelled its revenue into the top ten global beauty companies. However, The Body Shop had been underperforming during its time under L'Oréal, with FY2016 revenue of approximately 920 million euros and a year-over-year decline. Natura had to invest significant resources into reforming its supply chain and brand image, creating heavy integration pressure that foreshadowed its later divestment.
2020
Avon Acquisition and Global Ambitions Inflection Point
Natura &Co completed the acquisition of Avon through a stock-for-stock deal valued at approximately $2 billion. The group became the world's fourth-largest beauty conglomerate, with a sales network spanning over 100 countries and more than 6 million consultants. However, integration proved far more difficult than expected: Avon's North American business continued to shrink (revenue down over 10% YoY in 2019), international profit margins were sluggish, and managing four brands—Natura, The Body Shop, Aesop, and Avon—dramatically increased management complexity. From 2020, the COVID-19 pandemic hit the direct-selling model, leading to multiple consecutive quarters of net losses.
2023
Divestment of Aesop Turning Point
Natura &Co sold Aesop to L'Oréal for $2.59 billion to raise cash. Aesop was the group's fastest-growing brand (2022 sales grew ~20% YoY to $537 million), but its scale was far smaller than the group's loss-making black holes; the sale was seen as a 'life-saving' measure. In 2023, the group's net revenue was approximately 38.5 billion RMB, with the YoY decline linked to the separation of Avon North America, The Body Shop, and Aesop. The group recorded a full-year net loss, and risk exposure remained significant.
2024
Fire Sale of The Body Shop Failure
In 2024, Natura &Co sold The Body Shop to private equity firm Aurelius Group for £207 million, far below the 2017 acquisition price of 1.1 billion euros, representing an 80% loss in brand value over seven years. Before the divestment, The Body Shop had annual sales of approximately £880 million in FY2023 but continued to lose money. Weeks after the acquisition, Aurelius announced that the brand's UK business had entered administration, leading to the closure of over 2,000 stores and thousands of job losses. This deal became the most costly failure in Natura's M&A history, exposing the group's inability to manage multinational multi-brand integration.
2025
£1 Sale of Avon International Failure
Natura &Co signed an agreement to sell its Avon International business (including the Chinese market) for a symbolic £1 to an acquisition entity under private equity firm Regent, while assuming approximately $500 million in debt. Avon had largely lost its competitiveness in global markets outside of Brazil, and its North American business had filed for bankruptcy restructuring in 2022. From the $2 billion acquisition in 2020 to the £1 divestment in 2025, the acquisition was completely wiped out in five years. Post-transaction, Natura &Co retains only the Latin American market (Natura brand + Avon Latin America), retreating to Brazil and surrounding countries.
2026
Restructuring and Focusing on Latin America Growth
In Q1 2026, Natura Group's revenue declined by 7.7%, but the Natura brand remained the leader in the Latin American beauty industry for the ninth consecutive year, maintaining the top market share. The 2025 full-year financial report showed stable performance for brands like Natura and The Body Shop (retained Latin American operations), with the group's adjusted EBITDA margin rising 230 basis points YoY to 9.7%. New management is streamlining the structure, focusing resources on core markets like Brazil, Mexico, and Colombia, while experimenting with digital direct-selling integration through channels like TikTok Shop (where TikTok Shop Brazil beauty sales grew over 150% in H1 2025).
Turning Points
- After acquiring The Body Shop for 1.1 billion euros in 2017, the group's global stores and brand count doubled, with management complexity far exceeding the founders' expectations, planting the seeds for subsequent integration failures.
- After completing the stock-for-stock acquisition of Avon in 2020, the four brands operated in parallel, but Avon's North American business continued to shrink significantly, leading to multiple quarters of net losses and forcing the group to sell assets to raise cash.
- Selling the fastest-growing brand, Aesop, to L'Oréal for $2.59 billion in 2023 marked the group's shift from 'global expansion' to 'lean survival'.
- Selling Avon International for £1 in 2025 while assuming $500 million in debt signaled the total failure of the biggest acquisition in five years, with the group retreating entirely to Latin America.
Failures & Pitfalls
- The Body Shop never achieved profit improvements after its 2017 acquisition. After the 2024 fire sale, the buyer, Aurelius, placed the UK business into administration within weeks, marking a total failure of Natura's seven-year integration.
- Before the Avon acquisition, North American revenue had declined by over 10% YoY in 2019. Post-acquisition, the group failed to reverse the trend, and Avon North America filed for bankruptcy in 2022, becoming a financial black hole.
- From the completion of the Avon acquisition in 2020 to 2023, the group suffered multiple consecutive quarters of net losses, with market capitalization evaporating by over 70% from its peak, severely damaging shareholder value.
- Between 2020 and 2022, the group operated four brands simultaneously with over 6 million consultants, but failed to achieve digital and channel synergy. Brands competed with each other, and management was criticized for being spread too thin.
关键成功要素
- Started with a direct-selling model, expanding to over 1 million consultants in Brazil; 'relationship selling' remains the core moat of the Natura brand.
- Acquired international brands to gain global channels and stores, but lacked multi-brand management capabilities, eventually forcing divestments.
- Used proceeds from the Aesop sale to pay down debt and streamline headquarters, improving the adjusted EBITDA margin to 9.7% in 2025.
- After focusing on Latin America, the Natura brand has held the #1 market share for nine consecutive years; the integration of direct selling and digital (TikTok Shop, etc.) is the new engine for growth.
Lessons
- Synergies in cross-border M&A are often overestimated; cases like The Body Shop and Avon show that differences in culture, channels, and management systems can severely drag down integration progress.
- The most profitable assets are often the first to be sold during difficult times—Aesop was divested precisely because it was the most attractive, but this meant losing a future growth engine.
- Expansion faster than organizational capacity building leads to disaster; during the parallel operation of four brands, management was severely distracted, and the core Latin American market was neglected.
- Taking a step back is not necessarily a bad thing; Natura was profitably stable in Latin America before the 2017 acquisition of The Body Shop, and after divesting all international assets in 2025, profit margins are returning to pre-acquisition levels.
Core Data
- 2026 Q1 Revenue YoY Change：-7.7% (Public data, independent verification not performed)
- 2023 Full-Year Net Revenue：Approx. 38.5 billion RMB (Public data, independent verification not performed)
- 2022 Aesop Sales：$537 million (Public data, independent verification not performed)
- 2025 Adjusted EBITDA Margin：9.7% (Up 230 basis points YoY) (Public data, independent verification not performed)
- 2017 The Body Shop Acquisition Price：1.1 billion euros (Public data, independent verification not performed)
- 2024 The Body Shop Sale Price：£207 million (Public data, independent verification not performed)
- 2023 Aesop Sale Price：$2.59 billion (Public data, independent verification not performed)
- 2025 Avon International Sale Price：£1 (plus assumption of approx. $500 million in debt) (Public data, independent verification not performed)
- Avon Acquisition Valuation (2020)：Approx. $2 billion (Public data, independent verification not performed)
- Latin American Market Share Ranking：First for nine consecutive years (Public data, independent verification not performed)
- 2026 Q1 Latin American Revenue Contribution：Approx. 100% (After group focus on Latin America) (Public data, independent verification not performed)
Competitors / Peers
Natura &Co's main competitors in the Latin American market include the local Brazilian cosmetics group Grupo Boticário (owner of O Boticário and Eudora brands, whose market share is closely trailing Natura) and global giants L'Oréal and Estée Lauder. L'Oréal entered Natura's former 'cash cow' segment directly after acquiring Aesop in 2023 and continues to increase its investment in the high-end beauty market in Latin America. Estée Lauder maintains a solid share in Brazil's high-end department store channels through brands like MAC and Clinique. Additionally, the rise of TikTok Shop in Brazil has enabled a wave of new, agile DTC beauty brands (such as Melu and Trop) to capture young consumers through low prices and social media marketing, posing a structural challenge to Natura's traditional direct-selling network. Natura is responding to this shift by encouraging sales consultants to engage in social commerce and live-streaming sales.
Sources
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