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The Body Shop International plc, known as The Body Shop, is a British chain of cosmetics stores, now found all over the world. On 17 March 2006, The Body Shop agreed to a £652 million takeover offer by L'Oréal, the French cosmetics group. The company's headquarters is situated in Littlehampton, West Sussex, United Kingdom. It was founded by Anita Roddick, noted for selling its own line of products not tested on animals, and produced in an ecologically sustainable manner.
In 1970, Anita Perella and Gordon Roddick (who would later marry) visited the San Francisco Bay Area, and encountered a store on Telegraph Avenue in Berkeley selling shampoos, lotions, and body creams. The store, founded by two local entrepreneurs and also called "The Body Shop", publicized environmental concerns, and offered customers discounts for bringing in their own bottles instead of using new ones from the store. The original "Body Shop" business continues in the Bay Area as a small chain under the name "Body Time", a name they adopted after they sold Roddick the US rights to the "Body Shop" name in the early 1980s. There is some criticism because they not only copied the idea and name, but also product catalogues and image strategy.
The Roddicks' first Body Shop opened on 27 March, 1976 in Brighton, United Kingdom. This store opened next to an undertakers, who complained to the local council of the name of the store and the proximity to the undertakers. The local bookmakers nearby was taking bets on how long it would be before The Body Shop closed. In response to these oppositions Anita wrote a letter to the council stating that she was a housewife with kids trying to make a living. The rest, as they say, is history.
Like the San Francisco store, it offered homemade skin care and moisturizing lotions advertised to be made with natural ingredients. Products featured exotic ingredients such as jojoba oil and rhassoul mud from local herbalists and had simple, descriptive names such as Tea Tree Oil Facial Wash and Mango Dry Mist. In contrast to high street retailers, the packaging included details about ingredients and their properties. Customers could return to the store to refill product containers for a 15 percent discount.
Products were priced more expensively than mass-merchandised cosmetics, but more economically than exclusive brand names, and were never sale priced. Eschewing traditional cosmetics marketing, the company promoted itself with offbeat brochures (which sometimes were quite similar to those distributed by the Bay Area Body Shop), exotic ingredients, and a founder who made herself extremely accessible and popular with the press, and who made social and environmental activism the centerpiece of her company' marketing.
These were revolutionary ideas in the industry, and inspired a loyal clientele. By the end of the 1970s a chain of outlets had sprung up throughout the UK, and Anita Roddick hired a public relations firm to manage the ever-growing press attention.
The Body Shop experienced rapid growth, expanding at a rate of 50 percent annually. Its stock was floated on London's Unlisted Securities Market in April 1984, opening at 95 pence. In January 1986, when it obtained a full listing on the London Stock Exchange, the stock was selling at 820 pence. By 1991 the company's market value stood at £350 million ($591 million). After a volatile period of ups and downs, its 2004 market value would end up about the same as in 1991 (£334 million as of September 2004).
Social activism
From early on, The Body Shop reflected the activism of its founder Roddick, through billets posted on shop windows to sponsorship of local charity and community events. Roddick criticized what she considered the environmental insensitivity of the industry, and aimed to change standard corporate practices.
In 1986 The Body Shop formed an alliance with Greenpeace, campaigning to "Save the Whales", despite some concerns among franchisees that the head office was becoming too political. By 1990 Roddick had switched allegiances to Friends of the Earth, following disagreements with Greenpeace.
Critics of The Body Shop in the 1980s and 1990s called the organisation hypocritical in its pursuit of profit whilst espousing "social equality". It is said that some shareholders complained the company wasn't maximizing profits, instead funneling money into social works projects overseas. However, in 1994 Jon Entine reported that England's Charity Commission records show no charitable contributions from the company in its first 11 years of operation, and less than 1.5 % of pretax profits (which is the US corporate average) in subsequent years (up until fiscal year 1993, the latest year reported at the time).
The Body Shop and its franchisees fund a charitable foundation, The Body Shop Foundation, as well as a number of other ventures such as Children on the Edge, which works with disenfranchised children in Eastern Europe and Asia.
Trade not aid
By 1991, The Body Shop's "Trade Not Aid" initiative with the objective of "creating trade to help people in the Third World utilise their resources to meet their own needs" had started a paper factory in Nepal employing 37 people producing bags, notebooks and scented drawer liners. Another initiative was a 33,000 square foot (3,000 m²) soap factory in the depressed Glasgow suburb of Easterhouse, whose payroll included 100 residents, some previously chronically unemployed.
Sometimes considered anti-capitalist or against globalization, The Body Shop philosophy is in fact in favor of international marketplaces. The chain uses its influence and profits for programmes such as Trade Not Aid, aimed at enacting fair labour practices, safe working environments and pay equality. The Body Shop now prefers the term "Community Trade", reflecting its avowed practice of "trading with communities in need".
The Body Shop is however banned from China where cosmetics have to be tested on animals, says Dame Anita Roddick. *
Along with a number of other so-called socially responsible businesses, The Body Shop has undertaken periodic independent social audits of its activities (see http://valuesreport.thebodyshop.net)
Takeover by L'Oréal
On 17 March 2006, The Body Shop International agreed to a £652 million takeover offer by L'Oréal, the French cosmetics group. This is a controversial decision, as the Body Shop has always had a policy of not using any animal-tested ingredients in its cosmetics, but L'Oréal has the worst ethical rating from Ethical Consumer, on account of its animal testing policy. The Body Shop has also always had a policy of using only natural ingredients, but L'Oréal has, in the past, courted controversy by using chemicals in its cosmetics. Some animal protection organizations, such as PETA, issued notices to their members to encourage them to continue to support The Body Shop in the hope that The Body Shop's policies will spread to the entire company. L'Oréal is also 26% owned by Nestlé, another controversial company over allegations of corporate corruption, and its aggressive advertising of powdered milk in Third World countries.
However, The Body Shop has a reputation of being a "trojan horse" in its industry. L'Oréal has agreed to adopt the 'against animal testing' philosophy of The Body Shop, while The Body Shop obtains access to an expanded research and development department to venture further into the traditional natural-inspired ingredients of the world.
It is important to note that the £652m offer applies to The Body Shop International. This means for the greater part your local The Body Shop store will not change.
External links
British brands | Companies listed on the London Stock Exchange | Cosmetics companies | Fair trade | Retailers of the United Kingdom
"The Body Shop"