Brazilian Natura Finalizes Agreement to Offload Avon in Central America

Natura continues with its divestments. The Brazilian cosmetics company has agreed to sell Avon’s business in a number of Central American countries to Grupo PDC, a consumer products company. The transaction would be effective for one dollar, a symbolic payment, plus a credit of $22 million that Avon Guatemala has with Natura’s Mexican subsidiary.

The company will thus sell its operations in Guatemala, Nicaragua, Panama, Honduras, El Salvador and the Dominican Republic. This is yet another step in the divestment strategy in which the Brazilian company is immersed as a result of its difficulties in getting out of the red. It previously sold its brands Aesop and The Body Shop.

According to local media, the company’s shares, which are listed on the Sao Paulo Stock Exchange, rose by more than 3% after the announcement of the sale. For the time being, Natura will continue to supply finished products in the region affected by the sale.

Natura rises 3% on the stock exchange after announcing the sale of its Central American division of Avon

The transaction is scheduled to close on October 30th, although the date could be changed. The company added that it is “exploring alternatives” to do the same with the Avon International unit, which groups Avon’s businesses outside Latin America.

According to the latest results published, corresponding to the first quarter of the year, Natura has substantially increased its sales, but has not been able to recover its losses. In mid-May, the group announced job cuts at Avon, the division with the worst performance in the period.

Natura ended the period between January and March with a turnover of 6.67 billion Brazilian reais ($1.26 billion). The figure represents an increase of 45.8% over the previous year, thus boosting turnover in the period.

The core of the business continues to be Latin America, a market with a turnover of 5,285.1 million reais ($990 million). Through Avon International, the company recorded sales of 1,394.3 million reais ($261 million) through March.