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Tuesday, 12 February, 2002, 14:22 GMT
The end of Anita's heyday
Anita Roddick, founder of the Body Shop
Roddick believes business should be a force for good
by BBC News Online's Emma Clark

Anita Roddick believes there is no more powerful institution in society than business.

"The business of business should not be about money, it should be about responsibility," she says.


I believe the older you get, the more radical you become

Anita Roddick
"It should be about public good."

Ms Roddick has built her reputation and her retail empire, The Body Shop, with a quirky mix of radical rhetoric and pragmatic entrepreneurship.

But, in recent years, her combative stance on globalisation and outspoken comments on anti-wrinkle creams seem to have overshadowed any business acumen she was once credited with.

Making enemies

And, inevitably, her brand of ethical evangelism has led her to make enemies in London's financial district.


The less she has to do with the business the better

Richard Ratner
Seymour Pierce
Her decision to give up - along with her husband, Gordon - co-chairing the Body Shop group has been greeted with glee by her critics.

"It's very good news," says Richard Ratner, a retail analyst at Seymour Pierce.

"The less she has to do with the business the better."

For her part, Ms Roddick has openly delighted in her bleeding-heart radicalism.

On the Body Shop website, she writes: "I believe the older you get, the more radical you become. There's a quote I love, 'A woman in advancing old age is unstoppable by any earthly force.'"

Ousted

In 1998, Ms Roddick proved partly stoppable after she succumbed to shareholder pressure to step down as chief executive.

Body Shop store
The company has over 1,900 stores
"It was like handing over your child to complete strangers," she said later.

In 2000, she tried to distance herself further from the company by promising to quit the board in another two years.

Her zeal for ethical campaigning seemed to get the better of her and she told the Sunday Express she had "do some real populist campaigning".

Talk of her "retirement" in 2000, however, was premature.

She continued to spend most of her time working for Body Shop - whether it was travelling the world to find inspiration for new products or carrying out PR functions.

Nevertheless, she seemed to accept that she no longer possessed the magic formula for sales growth.

Starting up

Ms Roddick first founded the company in 1976 in Brighton to earn money for her two daughters while her husband was away travelling.

Body Shop timeline
1976: Founded in Brighton
1998: Patrick Gournay replaces Anita Roddick as chief exec
2000: Roddicks promise to quit the board in two years
2001: Profits halve
2002: Roddicks step down as co-chair
Her environmentally friendly ideas were ahead of their time and her "green" cosmetics store soon took off.

Ian McGlinn, a former garage owner who now owns about 25% of the company's shares, then lent the couple the 4,000 they needed to open a second shop.

Over the next decade profits continued to leap and at its height, in 1991, the company was worth 700m.

It is now closer to 180m, but has more than 1,900 stores in at least 50 countries.

Growing pains

The Body Shop's problems began in the early 1990s after an ambitious programme of international expansion failed to pay off.

"We just got everything wrong," Ms Roddick admitted later.

The company's foray into the US was particularly ill-fated after it neglected to do enough market research and battled with local incumbents such as Bath & Body Works.

Back at home, the Body Shop also started to face considerable competition from other retailers that jumped on the green bandwagon.

Boots the Chemist, for example, launched the Botanics and Natural Collection ranges to go head-to-head with the Body Shop.

Meanwhile exotic and wacky new product ranges overshadowed old favourites such as the peppermint foot lotion.

In the middle of last year, the new products and phasing out of old lines helped to halve the company's profits to 12.8m

The Body Shop's franchise structure, which enabled it to grow very quickly in the early days, also introduced control problems.

Management troubles

Ms Roddick's replacement in 1998, Patrick Gournay, a former division head for food giant Groupe Danone, was seen as the chain's new hope.

But as Seymour Pierce's Mr Ratner points out, Mr Gournay failed to boost sales, despite his strategy of buying back some of the franchises.

Mr Gournay has now agreed to leave by "mutual consent" and has been replaced by Peter Saunders, the chief executive of the company's North American operations.

Adrian Bellamy, a Body Shop director who entered into a joint venture with the Body Shop in 1998, is to take over as executive chairman.

Takeover disappointment

The departure of the Roddicks also follows a series of failed takeover talks with various suitors for the Body Shop.

Last year the little known Grupo Omnilife, a Mexican retailer that distributes nutritional supplements, failed to borrow enough money to back its $500m offer.

At about the same time, the Body Shop also snubbed an offer from the cosmetics chain Lush, reportedly because Ms Roddick did not believe its founder Mark Constantine was "ethical" enough.

The latest management shift has also accompanied the termination of further takeover discussions.

Uncertain future

Over the past year, the Body Shop's shares have outperformed the market, but news of more aborted takeover talks sent them down 10%.

The Roddicks, along with their friend Mr McGlinn, also continue to control almost 52% of the shares - something the City is still leery of.

It is unlikely that Ms Roddick will completely abandon her "child", but it certainly seems that she is slowly relinquishing her control.

Whether Mr Saunders and Mr Bellamy can begin to reinvigorate the chain in the mode of another British favourite, Marks & Spencer, remains to be seen.

See also:

12 Feb 02 | Business
Body Shop chief steps down
26 Jun 01 | Business
Body Shop plunge as talks end
12 Jan 01 | Business
Body Shop shares slump
24 Aug 01 | Business
Roddick blasts Body Shop
19 Sep 00 | UK
Not the retiring kind?
24 Nov 99 | Battle for Free Trade
Roddick blasts world trade body
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