Body Shop Brand: Repositioning to Target the 'Masstige' Segment and Impact of its Acquisition by L'Oréal

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Case Details:

Case Code : MKTG181
Case Length : 25 Pages
Period : 2000-2007
Pub Date : 2008
Teaching Note :Not Available
Organization : The Body Shop International Plc.
Industry : Beauty care / Cosmetics
Countries : Europe, USA.

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

Acquisition by L'oréal

On March 17, 2006, TBS announced that it had agreed to be taken over by L'Oréal in a £652 million (US1.14 billion) deal. L'Oréal offered 300 pence a share, a premium of 34.2% to TBS's closing price of 223.5 pence on February 21, 2006...

Have The Body Shop Sold Out?

TBS immediately came under fire as L'Oréal allegedly used animal testing for cosmetics, something Roddick had opposed throughout her 30 years of business life. Critcs also alleged that L'Oréal exploited the sexuality of women. They recalled Roddick's earlier criticism against L'Oréal for engaging only sexy women in their stores. In a statement on its website, Naturewatch said: "We feel that the Body Shop has 'sold out' and is not standing by its principles." Ruth Rosselson (Rosselson) of Ethical Consumer magazine said, "It's ironic that a company well known for its anti-animal testing stance should sell out to one that tests on animals and which has yet to show its commitment to any ethical issues at all."...

Body Shop's View

TBS clarified that the acquisition by L'Oréal would not diminish its ethical stance and it would continue its animal testing policy. TBS spokesman Bill Eyres said, "It has been agreed that all our values are ring-fenced and we will continue to apply our animal testing policy."...

What does the Future Holds for The Body Shop Brand?

Both the companies had high hopes from the merger. L'Oréal was hoping that TBS would help enhance its business. It felt that TBS with a presence in 54 countries was a "sizeable and complementary brand", and it would help L'Oréal to increase its presence in the "masstige" segment. According to Euromonitor International's (Euromonitor) Briony Davies, L'Oréal, which had lost its leadership in the global cosmetics and toiletries market to P&G in 2005, had a lot to gain from the acquisition of TBS...


Exhibit I: Awards Won by Anita Roddick
Exhibit II: Top Three Competitors of TBS
Exhibit III: Key Financials of TBS
Exhibit IV: TBS's Values
Exhibit V: TBS: Brand Statement
Exhibit VI: The TBS Logo
Exhibit VII: Views of the New Store Design
Exhibit VIII: TBS's 'Love Your Body' Card


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