Results from Body Shop hurt shares

BY NIGEL COPE

Shares in Body Shop, the cosmetics and toiletries retailer, lost 13 per cent of their value yesterday after the company announced disappointing results and a warning of little or no profits growth next year.

However, Anita Roddick's creation plans to maintain its position as a pioneer of unusual ideas when it launches a radio station on the Astra satellite in the autumn.

Body Shop says the station, yet to be named, will cost about £500,000 a year to run and be broadcast from London. It will play 90 per cent music and 10 per cent talk and be available in all stores. "We haven't decided what the 'talk' will be yet," marketing director Jilly Forster said.

The cause of yesterday's profits slide, which saw the share price sag 23.5p to 152.5p, was a poor performance in the US where profits fell from £6.2m to £4.9m in the year. Like-for-like sales fell 3 per cent and are down 8 per cent since the year-end.

The company blamed the hectic pace of expansion in the US for the problems. The battle to find new sites had made the company lose sight of the lack of new products and less efficient service in the US stores, it said. Body Shop opened 65 shops in America last year but will open 40 this year.

Gordon Roddick, chairman, said the US business needed a period of consolidation and focus. Retail and marketing functions would be strengthened. Management has also been firmed up with the appointment of Terry Hartin, who sold his cosmetics business to Body Shop in the UK in 1991, as chief operating officer.

The company said the negative publicity attracted last year by a magazine article disputing Body Shop's environmental claims had had a negligible effect on trading performance. A more important factor was competition from rivals such as Bath & Body Works, the US market leader, which has been competing heavily on price.

Ms Roddick said. "Competition has become a real issue. Retailing is a tough world, but in 1995 we will be surprising a few people."

Body Shop put a mobile shop on the road in America last year in a huge lorry. Shops are being re-designed and an advertising campaign is expected later in the year. Ms Roddick said: "We've just been opening up stores and hoping people would come in. We've got to go out and grab people."

Body Shop will spend between £5m and £36m on new products and store designs this year and will continue its Body Shop direct service, which has 500 consultants.

In the year to February, group pre-tax profits rose 13 per cent to £33.5m on turnover up 12 per cent to £219.7m. Body Shop opened 157 stores during the year, bringing the total to 1,210.

Investment Column, page 34

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable