Natura Sells Avon International to Regent: A Strategic Shift in the Cosmetics Industry
Published: September 20, 2025
In a significant move that marks a new chapter for both Natura & Co. and Avon, the Brazilian cosmetics giant announced on Thursday that it has finalized the sale of its Avon International unit to Regent, a holding firm. This decision comes after a prolonged period of uncertainty regarding the future of the business, which Natura had been evaluating since last year.
A Strategic Decision Amidst Financial Challenges
The sale of Avon International, which encompasses operations outside of Natura’s primary Latin American market, has resulted in a notable surge in Natura’s stock, with shares on the São Paulo exchange climbing over 13%. This uptick reflects investor optimism regarding the company’s strategic pivot towards simplifying its structure and focusing on its core markets.
Natura has faced mounting challenges in recent years, grappling with profitability issues that have prompted a series of divestitures. The company has previously sold off brands such as Aesop and The Body Shop, and just days before the Avon deal, it announced the sale of Avon’s Central American operations to Grupo PDC. These moves are part of a broader strategy aimed at streamlining operations and enhancing financial stability.
The Details of the Transaction
The agreement with Regent includes Avon’s businesses in Europe, Africa, and Asia, but notably excludes its operations in Latin America, which remain central to Natura’s strategic priorities. Additionally, Avon’s Russian business is still classified as “held for sale,” while its U.S. operations, which were never part of Natura’s portfolio, are also not included in this transaction.
Natura will receive a nominal payment of £1.00 (approximately $1.36) at the closing of the deal, with potential contingent payments based on future performance and specific liquidity events, capped at £60 million. This structure indicates a cautious approach, reflecting the challenges Avon International has faced in maintaining profitability.
Historical Context: The Evolution of Avon
Founded in 1886, Avon has a storied history as a pioneer in the direct-selling cosmetics industry. The brand became synonymous with empowering women through entrepreneurship, allowing them to sell products directly to consumers. However, in recent years, Avon has struggled to adapt to changing market dynamics, facing stiff competition from both established brands and emerging players in the beauty sector.
Natura’s acquisition of Avon in 2020 was initially seen as a strategic move to expand its global footprint. However, the integration proved more complex than anticipated, with Avon International consistently underperforming compared to Natura’s Latin American operations. Analysts at Santander noted that the divestiture should alleviate concerns regarding the need for additional cash injections to sustain Avon’s operations, which have been described as “cash-burning.”
Implications for the Cosmetics Market
The sale of Avon International to Regent is not just a pivotal moment for Natura; it also signals broader trends within the cosmetics industry. As companies increasingly focus on core competencies and streamline operations, the landscape is shifting. The rise of e-commerce and changing consumer preferences have forced traditional brands to rethink their strategies.
Natura’s decision to divest from Avon International aligns with a growing trend among cosmetics companies to concentrate on markets where they have a competitive advantage. By focusing on Latin America, where it has established a strong presence, Natura aims to enhance profitability and operational efficiency.
Looking Ahead: The Future of Natura and Avon
As Natura moves forward without Avon International, the company is poised to concentrate on its core markets and strengthen its brand portfolio. The divestiture allows Natura to allocate resources more effectively and invest in growth opportunities within Latin America, where it has seen success.
For Avon, the sale represents a chance to re-evaluate its business model and explore new avenues for growth under Regent’s ownership. The brand’s legacy as a leader in direct sales may provide a foundation for revitalization, but it will need to adapt to the evolving landscape of the beauty industry.
Conclusion
Natura’s sale of Avon International to Regent marks a significant turning point for both companies. As Natura focuses on its core Latin American markets, it aims to enhance profitability and streamline operations. Meanwhile, Avon faces the challenge of reinventing itself in a competitive environment. This transaction not only reflects the shifting dynamics within the cosmetics industry but also underscores the importance of strategic decision-making in navigating financial challenges. As both companies embark on their respective journeys, the implications of this sale will be closely watched by industry analysts and investors alike.
