Body Shop plans ad blitz to lift UK sales

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The Independent Online
Body Shop International, the campaigning toiletries retailer, will launch its first really big UK advertising campaign later this year. It will be designed to boost sales of planned new product launches and help lift UK sales which have been poor.

Body Shop has typically spurned the use of advertising in favour of campaigning publicity initiatives often led by founder Anita Roddick. Most of the group's previous advertising moves have been relatively limited affairs, mostly in the United States where the company has also been struggling.

Angela Bawtree, head of investor relations, said: "It won't be a huge television campaign with slots during News at Ten. It will mostly be a print campaign." She declined to put a value on the move.

The announcement came as Body Shop disappointed the City with poor sales figures and news that last year's profits had been hit by a heavy charge for re-structuring its struggling French operation.

The company has taken a pounds 6.5m charge related to the business which has been battling against weak demand and high rental costs. The write-off will cover loans to the head franchise operator and the company is seeking a new franchisee.

"The stores were affected by the bombs of last year and sales didn't recover," says Ms Bawtree. "The franchisee was not in a position to invest further. We didn't want to take the stores over as we feel they should be run by a French operator. We are in talks with various potential replacements."

The shares fell 2p to 188.5p as analysts digested a 2 per cent fall in like-for-like sales in current trading across the group. Though the British stores are showing 3 per cent growth after a flat period last year, sales in the US are 4 per cent lower.

The company appointed a new US chief executive last September and has been improving its product packaging and stores to suit an American audience. "We knew it was going to take time but we are confident we are moving in the right direction," Ms Bawtree said.

Group profits, excluding exceptional items, were 17 per cent higher at pounds 38.2m in the year to 1 March. The dividend has been increased by 38 per cent to 4.7p a share, in line with the company's plans to adopt a progressive policy on the payout. The company also has pounds 25.2m of net cash.