Case 4.3 The Body Shop International:The
most honest cosmetic company in the
world
This case was written by Andrew Campbell, one of the Directors of the Ashridge
Strategic Management Centre in London.
Every year the cynics wait for The Body Shop to trip over its ideologically
pure feet and every year they are disappointed. Although imitators have
inevitably arisen, The Body Shop benefits from being clearly identified as
the leader of the pack in the growing market for toiletries and cosmetics
aimed at the environmentally oriented, health-conscious consumer.
The Body Shop ‘originates, produces and sells naturally based skin and
hair products and related items through its own shops and through fran-
chised outlets’. The business has grown rapidly since it opened its first shop
in Brighton in 1976, and in 1990 it had a turnover of £84.5 million and 457
outlets in the UK and overseas. In the seven years since its flotation, the
company has increased both turnover and profits by a factor of nine, and has
been described as ‘the share that defies gravity’. This is despite the onset of a
recession in retailing. Financial performance for the last five years is detailed
in Table 4.3.1. Although it is not one of the largest retail operators, The Body
Shop has been particularly influential because of its phenomenal success, its
strong underlying philosophy and the press coverage it has received.
Much of the press coverage has centred around managing director Anita
Roddick, a charismatic, outspoken and determined figure who has a
simple formula to explain the secret of her legendary success: ‘I look at
what the cosmetics trade is doing and walk in the opposite direction.’
The extent of this success is such that she claims that The Body Shop is
Britain’s most international store. ‘We produce over 300 products sold in
well over 300 shops from the Arctic Circle to Adelaide, covering 31 coun-
tries and 13 languages, without once diluting our image.’ Actually by
February 1990 The Body Shop was operating with 457 shops, 139 in Britain
and 318 in 37 other countries. A further 25 UK outlets and 180 overseas were
due to open in the following 12 months, including a shop in Japan in
October 1990. Preliminary research has been conducted into the feasibility
of opening in Moscow.
Anita Roddick has won many accolades from the business community,
including the Business Enterprise Award for company of the year, and
Business Woman of the Year. In her acceptance speeches she savages cor-
porate approaches to business and in particular traditional ways of doing
business in the retail and cosmetics sectors:
Retailing itself has taught me nothing. I see tired executives in tired systems.
These huge corporations are dying of boredom caused by the inertia of288 Relationship Marketing