Cosmetics maker Natura &Co Holding SA is considering the sale of its Body Shop unit as it seeks to cut costs, the latest step in a reversal of a major global expansion strategy.

Shares in the Sao Paulo-based company rose as much as 6.4% Monday, before paring gains, after it announced board approval to explore strategic alternatives for The Body Shop, including a potential sale. It acquired the British retailer from L’Oreal SA about six years ago.

The move adds to a shift for Natura, which has been returning focus to its core Latin America business after grappling with disruptions brought on by the pandemic and cost-inflation pain amid Russia’s war in Ukraine. The company sold its luxury cosmetics brand Aesop to L’Oréal this year.

A sale of The Body Shop could reduce “corporate structure complexities and costs,” while helping Natura allocate capital “to its core strengths,” Bradesco BBI analyst Felipe Cassimiro wrote in a report last month.

--With assistance from Danielle Chaves.

Author: Vinícius Andrade