Roddick quits helm at Body Shop

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The Independent Online
ANITA Roddick, the outspoken founder of the Body Shop retail empire, is to relinquish day-to-day control of the company for the first time in the environmentally friendly group's 22-year history. The move follows City disappointment over a sustained period of underperformance caused by the company's poor trading, particularly in the United States.

Ms Roddick, 55, who founded the company with a single store in Littlehampton in 1976, will become co-chairman with her husband Gordon. Patrick Gournay, currently a director of Danone, the French foods group, will become chief executive in July.

Separately, Body Shop is hoping to kick start its loss-making American business by transferring it to a joint venture operation controlled by Adrian Bellamy, one of its non-executive directors. The Roddicks said they were making the changes because they recognised that while they had certain skills they did not have the all-round management expertise to tackle the problems in a business with 1,600 shops spread across dozens of countries.

Commenting on the prospect of handing over the reins at the company she founded, Ms Roddick reacted in typically passionate fashion: "I am not taking a back seat. I have no intention of marginalising myself from this business as a non-working director I just can't see myself retiring. I will still do what I do best - that's marketing, styling, image, store design and so on."

Asked what her new role as co-chairman would actually mean, she said: "I have no bloody idea." Gordon Roddick added that his wife's title as chief executive "was always a bit of a misnomer" but that she would continue to haven a significant input into the "creative" aspects of the business."

"I loathe financial planning," his wife continued. "Everyone is always talking about budgets. Have you got the budget for this or for that. Perhaps now I'll have a budget of my own."

The changes were greeted with a mixed reception in the City. One analyst said: "It doesn't matter what title Anita has, she will still be bouncing around the business like a pin-ball."

Robert Clark at Corporate Intelligence on Retailing, a retail consultancy, added: "There's little doubt that Body Shop required changes at a senior level. The problems were in orchestrating all the far-flung parts of the business. They needed an organiser, someone with experience on an international level.''

Mr Gournay, who was not available yesterday, was described as a manager skilled at implementing change programmes at big businesses. He has spent 26 years with Danone, most recently as vice president of its North and South American division.

The Roddicks confirmed they have no intention to revive plans to take the business private, having abandoned the idea in 1995 due to worries over high debt levels. They also said they had no plans to sell their stake and retire. "When you have spawned a business like this it is very difficult to sever the umbilical chord when you haven't quite achieved what you wanted. I'd rather go to the grave knowing that I did what I could rather than looking back and wondering. I don't see it as a burden. I think it will keep me feeling young for ever."

Gordon Roddick added: "To go away from it now would be to say we weren't able to make this transition."

However, they denied there could be friction between directors in a complicated management structure that features two chairmen, a deputy chairman and a chief executive. Ms Roddick said that although Mr Gournay would be chief executive they had established certain "non-negotiables", such as the company's ethical stance. "Patrick's vision is very closely allied to our own. We are just facing up to the reality that we don't know how to get the business where we want it. We know how to grow shops and take the format and repeat it. We didn't have the skills to re-think it."

She admitted that mistakes had been made, such as the hiring of some unsuccessful managers in the United States and the decision to move the US head office to North Carolina instead of a big city like New York or San Francisco. Basic retail mistakes were also made, such as having too many product lines, in poorly renovated stores with too few products that were tailored for the needs of individual countries.

In America, Body Shop will form a joint venture with a company run by Adrian Bellamy, who became a non-executive director of Body Shop last year. Mr Bellamy, a former chairman of the US duty-free goods retailer DFS will pay $1m (pounds 600,000) for an option of buying 49 per cent of the US business at net asset value, currently $49m. These options will be triggered between 2000 and 2002 subject to performance targets.

The company said it had been paving the way for the deal by buying in 68 franchise outlets last year. It said the initiative for the deal had come from Mr Bellamy, who approached the board last year.

The changes were announced as the company announced flat pre-tax profits of pounds 38m for last year. Like-for-like sales were also flat, reflecting problems in large markets such as America and the Far East.

Losses at the US operation were cut from pounds 3m to pounds 1.7m but like-for-like sales were down by 5 per cent on last year and by 3 per cent in current trading. Same store sales in the Far East are down 14 per cent in current trading, with Japan particularly weak.

Body Shop has set up an internal review to examine its position as a vertically integrated retailer. This could lead to a restructure of its manufacturing operations. Ms Roddick, who is increasingly concerned about store rents and the power of high street and shopping mall landlords, is keen to put more emphasis on direct selling. She is also keen to expand the Body Shop brand to include leisure services such as "weekend retreats".

Body Shop shares closed a penny higher at 120.5p.

Outlook, page 23

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