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Troubled Body Shop cuts 300 jobs

BODY SHOP International, the struggling "green" cosmetics retailer, yesterday announced 300 job cuts as part of a major restructuring designed to boost the stores' flagging performance.

Two hundred of the jobs will go at the head office in Littlehampton, West Sussex, while the remainder will be cut from distribution and manufacturing. The programme will be completed by the end of next month.

The cuts, which were first mentioned in the company's Christmas trading statement in January, are part of a major corporate overhaul being undertaken by chief executive Patrick Gournay, who joined the company last year. Reporting a sharp fall in profits, Mr Gournay warned investors not to expect "a quick fix" but claimed the company was now moving in the right direction.

Talks to sell its manufacturing operations are now well advanced and a deal should be announced within the next few months, though the identity of the buyer has not been disclosed.

Moves to brighten up the stores are under way, with the number of product lines being reduced from 900 to 700 in order to remove "clutter" and give more space to top-selling lines.

A new loyalty programme will be introduced in the summer, with benefits such as product previews and invitations to other in-store special events.

Body Shop has been buying in more of its franchises in order to maintain more control over its far-flung empire of 1,600 shops. It hopes to double the number of company-owned stores in the UK from 80 to 160 over the next two years.

Body Shop's pre-exceptional profits fell from pounds 38m to pounds 24.5m and were further hit by almost pounds 17m of restructuring costs. The redundancy programme will cost pounds 7m but yield cost savings of pounds 8m, the company said.

The shares fell a penny to 96p.