Body Shop explores new markets

The Body Shop International is preparing for significant expansion next year as part of an innovative programme designed to capitalise on the brand's growing strength around the world.

The company expects to establish franchise networks in South Korea and South Africa in 1997 and is also exploring new store formats and more use of direct marketing.

Head franchisees are close to being signed in both South Korea and South Africa. The Body Shop is also examining the Indian market but is not expected to establish a presence there in the immediate future.

Anita Roddick, The Body Shop's chief executive, recognises that its brand, ranked second in the world in retailing behind Ikea, can be best exploited by using the company's distribution expertise to channel its products into new international markets and into retail formats that are tailored more closely to the needs of customers.

The Body Shop has already started experiments with small outlets in hospitals. Last week, it opened a unit at Hope Hospital in Salford, which it will monitor along with a similar outlet at Derryford Hospital in Plymouth that opened earlier in the year.

The micro store could play an important part in its expansion ambitions in Japan and city centres such as London, where space is at a premium. It could also be introduced into office complexes, shopping malls and as company stores.

The Body Shop is also planning an international expansion of its direct sales operations into Switzerland and Canada.

The Body Shop Direct home retailing business was set up in the UK three years ago, and analysts expect its turnover to double this year to around pounds 9m and make a first contribution to group profits.

The concept has been remarkably successful. It is operated through the franchise network, with nearly 90 per cent of franchisees participating in the scheme. It employs 1,100 consultants, all trained and overseen by The Body Shop, who sell merchandise in private homes to small groups of potential customers.

The scheme is designed to complement rather than compete with the retail network by appealing to customers who do not normally visit the high street stores.