Sales lapse, costs send Body Shop into the red

TOILETRIES and make-up group Body Shop International yesterday reported a tumble into the red after a slip in sales and heavy costs.

The group, famous for its “environmentally-friendly” stance, said sales had been hurt by tougher trading conditions in Europe and the US.

Like-for-like sales for the six months to August 31 were down 1% on the same period last year, while in Ireland and Britain, where the group has 319 shops, sales showed a 3% slide.

Body Shop said the fall in the UK was due partly to destocking its make-up range ahead of launching new products, and to a smaller summer sale this year.

The sales decline contributed to half-year, pre-tax profits before one-off costs.

Those profits slid to stg£2.5 million from stg£3 million for the same period the previous year.

However, one-off costs pushed the group stg£700,000 into the red.

Those one-off costs related to exiting Botanicus, its natural products retail partnership, and redundancy costs.

Body Shop was upbeat about the future, saying like-for-like sales for the first five weeks of the new financial year were up 3%, although the comparisons were distorted by the impact of the September 11 terrorist attacks.

Chief executive Peter Saunders said: “Our outcome for the full year is, as always, dependent on trading during the Christmas period, but we continue to believe that there will be an improvement in performance over last year.”

Mr Saunders took over as chief executive in February, along with executive chairman Adrian Bellamy.

The change followed the decision by Body Shop’s co-founders, Anita and Gordon Roddick, to take a back seat.

The new management was charged with turning around the company’s falling sales.

Body Shop issued three profits warnings in the 18 months before the management reshuffle, which also followed the collapse of takeover talks with Mexican firm Omnilife.