Cynics argued that for a company which had spent so much time shunning the mainstream and muscled corporations that dominate it, L’Oréal’s purchase of The Body Shop would be a nail in the coffin for the specialist ethical chain.
But fast-forward two years after its £652m sale, the retailer continues to grow. Last year it opened 161 more stores, increasing its total to 2,426 in 59 countries, while a L’Oréal financial report reveals that the Body Shop’s like-for-like sales rose by 5.7%.
Many are starting to believe that far from gobbling up the Body Shop and churning it out as some kind of L’Oréal clone, it has been given a much-needed shot in the arm.
The Body Shop empire was started in 1976 by Anita Roddick, who sold her home-made beauty products from a small store in Brighton. By 1978 she began expanding her franchise overseas and by 1986 it was fully listed on the London Stock Exchange.
But with mass-market rivals entering the fray The Body Shop started to languish.
Mike Godliman, retail expert at Pragma Consulting, says: “In the late Eighties Tesco and Boots started selling ‘me too’ products and this really hit The Body Shop’s sales. It has taken a long time for them to change.”
Today the stores are fitted out differently. While some of the changes began prior to its sale to L’Oréal its new store concept is being progressively rolled out across all its outlets. Gone is the earthy yellow and green décor in place of a lighter and more contemporary feel.
“L’Oréal has really shaped up The Body Shop and created a more sophisticated and fresh brand,” Godliman says. “It looks like they’ve brought the edge in L’Oréal’s marketing to The Body Shop.
“Before, the stores felt very cluttered. It felt like your favourite auntie. They have also improved the packaging and introduced new ranges.”
And with the current focus on all things green, The Body Shop’s ethos of 30 years is finally catching on. Roddick, the brand’s outspoken founder, who passed away in September last year from a brain haemorrhage, firmly positioned The Body Shop as an ethical and green-conscious business, championing fair-trade practices and vehemently opposing the use of animal testing.
Graham Hales, chief communications officer at Interbrand, says that its long heritage in social and environmental activism puts it ahead of the pack. But, he adds, it now faces a new challenge in the form of increased and aggressive competition.
“Part of the problem for the Body Shop now is that everyone has caught up,” he explains. “What is damaging the brand is that the very cause it is based on is now so popular among other brands, it needs to do something else. It must plough further forward, and I don’t see it doing that at the moment.”
Last year the retailer appointed ad agency Leagas Delaney as part of its plans which included the most significant marketing investment into the brand since inception. It is understood to be considering using above-the-line advertising where in the past it has primarily relied on word of mouth and in-store promotions.
Leagas Delaney managing director Elliot Moss says that “green” has become a “hygiene factor” – in other words, it won’t get people through the door but it may turn them off if a company is found to be lacking in green credentials.
Details of the new marketing strategy are expected to be unveiled in August but according to Moss its key role will be to respect the existing values and not try to change them.
The big challenge, Moss declares, will be “understanding how it should be presenting itself in 2008”.