Body Shop customers remain loyal despite L'Oreal takeover
There has been no sign so far of Body Shop customers deserting the
green toiletries chain after its founder Dame Anita Roddick's decision
to sell out to the global cosmetics giant L'Oreal.
Critics of the 650m takeover have focused on the French group's
policies on animal testing and had suggested that Body Shop's loyal
customers might take their custom elsewhere in protest. But yesterday
the 2,000-strong international store chain said like-for-like sales
were ahead 5% in recent weeks.
The trading update came as Body Shop, founded more than 30 years ago, announced a 5% increase in profits for the year of 37.6m.
The L'Oreal deal, revealed in March, surprised almost all City
analysts. Many believed that Dame Anita - who had publicly criticised
L'Oreal and its anti-ageing products - would never agree to such a
takeover, especially as L'Oreal is 26% owned by Nestle, one of the most
boycotted companies in the world. Dame Anita had tried to block
Unilever's takeover of Ben & Jerry's, the US ice-cream business
with an ethical reputation like that of Body Shop.
Other analysts voiced surprise that L'Oreal would want to go into
the retail business. Its empire has been built almost solely on brands
and its only other retail outlets are a handful of Kiehl's natural
Dame Anita and her husband Gordon Roddick cashed in their 18% stake
for 117m. The deal will be finalised at the end of this month. Dame
Anita plans to use her famous powers of persuasion to encourage L'Oreal
to use more raw materials from fair trade sources. She has also pledged
to give away her fortune before she dies.
The chairman and chief executive of the retail chain, Adrian Bellamy
and Peter Saunders, are to continue running it under its new ownership.
Mr Bellamy will receive more than 22m for his 3.4% stake.
A Body Shop spokesman said: "As we can see from current trading, our
customers continue to shop with us and buy our ethical products."
The chain had warned on profits after it endured tough trading in
Britain and America over Christmas, but that was partly offset by sales