MT Profile: Anita Roddick

FROM THE MT ARCHIVES: The Body Shop may be the UK's most successful retailer but its fiery founder still sneers at the demands of her investors, says Andrew Davidson. So if the Anita Roddick could find the funds to buy the business back, where would she like it to go?

by Andrew Davidson
Last Updated: 14 Aug 2012

Anita Roddick, all in black, scuttles into the room, head down, corkscrew hair waving around. She is clutching some files and a pair of glasses, and looks shorter and a lot younger than I expected. There is a certain fumbled coyness about the initial greetings, even a shyness, as she barely looks up. It takes time, it seems, to set her at her ease.

We are meeting in a little corner office of The Body Shop's vast, pagoda-pastiche headquarters in Littlehampton, close to where she was brought up. Outside, grey rain falls on the rows of drab little houses that make up this tiny Sussex resort. Inside everything is bubbling. Pounding dance music bursts from the ground-floor canteen every time the door flies open. Young staff, predominantly female, bustle round the large, open-plan offices upstairs. Over 1,300 people work here on two sites. 'It's too big, the communications too complex,' shrugs Roddick. 'But I'm thankful anyone comes to Littlehampton,' she adds. 'It's not the most creative place to be.' She fiddles with her glasses as we talk.

At 53, as founder of The Body Shop, she should have a lot to be cheerful about. Her company, with over 1,200 outlets worldwide, is now Britain's most successful international retail business. Twenty years old this month, it has survived two recessions, a fluctuating exchange rate, a bout of rapid expansion and a host of those business-of-the-year-style awards that are guaranteed to put the hex on any firm. It has also remained solidly a family affair: her husband Gordon chairs the company. One of her two daughters also works at the Littlehampton headquarters.

But it is well-known that all is not plain sailing down here on the south coast. A slumping share price, poor performance in the US and a general discontent with the way the City deals with the company has led to speculation that the Roddicks want to buy The Body Shop back. Roddick herself has also hit something of an image problem.

Her strategy of relying on personal publicity to sell the company, and at the same time preaching endlessly about environmental, gender and human rights issues, has irritated more people than it has intrigued, leading some to suggest that she has been on a prolonged ego trip. So in recent years she has kept her head down and concentrated on running the business. Apart from the odd American Express ad, that is, and a speech here and there.

Yet what a business. Roddick, the daughter of Italian immigrants, has taken The Body Shop from one rickety shop in the backstreets of Brighton to a global franchise corporation with retail sales of £500 million trading in 45 countries and in 23 languages in extra-ordinarily quick time - not bad going for someone who only went into retailing because she was tired of running a cafe and wanted a job with sensible hours.

Famously (and I wonder whether this needs retelling with sales of her autobiography Body And Soul running at 140,000 worldwide) she ran the first shop, selling cheap natural cosmetics and lotions, on her own after husband Gordon had taken off to ride a horse across South America. The horse died, Gordon returned and took over the boring bits, mainly filling the bottles and doing the figures.

Now chairman, he still does what his wife sees as the boring bits - sorting out the financial side of the business and keeping a low profile (though he does, apparently, play a mean game of polo in his spare time) - while she gets on with the dynamic bit, organising new products and leading from the front. Clearly, on a personal level, it works. They are now the most famous husband-and-wife team in British business.

Yet since floating the company in 1984, both Roddicks have constantly struggled against what they would describe as the expectations of the money men: how they should run their company and what they should be doing with the money.

The sense of conflict has grown, leading to their recent confirmation that they are looking to take the company private again. If Anita Roddick gets her way, she will put ownership into a foundation which will protect the company long after she and Gordon are dead. It throws up a lot of questions. Who will lend her the money? Will a foundation have the business nous to run the company profitably? Will it even be able to protect the company from predators? And will she ever persuade shareholders to sell, especially the near-legendary 'sleeping investor', Ian McGlinn, the south-coast garage-owner who lent Roddick £4,000 to open her second shop and got half the company in return?

'Oh, Christ,' says Roddick, running her hand back through her hair, 'what a question! You know I can't talk about it.' Indeed she can't, for until she comes up with a concrete proposal to put to shareholders she is gagged by Stock Exchange rules, but the impression she gives is that she wouldn't be doing it if McGlinn, whose initial stake eventually made him a multi-millionaire, didn't agree. 'He's the perfect sleeping partner,' she says, 'he's never woken up.' The rumours of a buy-back first surfaced late last year and were confirmed 'by sources' before Christmas. However, according to some Body Shop franchisees, it is an idea that the Roddicks have knocked around for years. The slump in the share price simply made it a lot more feasible. The delay in implementing the plan suggests, though, that the Roddicks have still not found it as easy to raise the buy-back cash as they thought.

What Anita Roddick can talk about - and she is, of course, one of the business world's great talkers, provocative and funny and, warmed up, a natural show-off - is The Body Shop's birthday and the completion of its first, much trumpeted 'social audit'. This is the company's first attempt to gauge its impact on its 'stakeholders' - a fashionable word (ask Tony Blair) which has nothing to do with shareholders but is designed to cover anyone who comes into any contact with the business: employees, suppliers, customers and assorted City folk.

The company already does audits to assess the impact of its products on animals and the environment. The social audit is the logical next step, an attempt by Roddick to develop a more holistic approach to company health, a shift away from the British obsession with short-term profit.

Now, she emphasises, this does not mean, as some have interpreted, that she thinks the financial figures are unimportant. 'I am not a dickhead. Of course I want to know what the figures are.' But to concentrate only on the figures is dumb, she says. 'To have such a small layer of interest take up so much of a company's measurement is bizarre. Why should the notion of a shareholder have more rights than the notion of an employee or the community or the environment? It is a bizarre philosophy, which I am not part of at all.'

But if she hates the system why did she get into it in the first place? Why did she float? She must have been well briefed as to the financial demands it would place on the company. She had to, she answers, to get credibility for retail sites. 'Property owners control retailing and we just weren't being taken seriously,' she says. Then there was the issue of reducing McGlinn's half-share, and giving staff an opportunity to buy a stake in the outfit. And also, she says, it was a sexy thing to do at the time.

'It's like: why not? When you have a crazy idea that should never have existed, all you want to do is push it to see how far it will go. It was a huge barometer of reassurance and a way of getting more money. It was like growing up.' Then it was vanity. No, she says. 'I tell you, when you are in your 40s, as I was then, vanity is not important. We were just excited about making it bigger, about getting The Body Shop round the world. I mean, getting it into places like Auckland. It was crazy.' Crazy but lucrative. Roddick says she doesn't want to talk about figures - she can't remember that kind of thing, I can ask Gordon if I want. But it's worth bearing in mind that some of the hostility between Roddick and the City has come about because of doubts over the company's recent financial performance.

Despite the robustness of its figures all through the turbulence of the '80s and early '90s - anyone investing in the company on its stock-market debut, for instance, would have seen his or her stake multiplied 76-fold by February 1992, when shares hit a peak of 370p - a lurch into the red in America last year and the perception that competition was eating away at its margins have dented its performance.

By the end of last year, Body Shop shares were languishing closer to 130p, after a 26% fall in half-year profits and an announcement that full-year profits were likely to be unchanged (£33.5 million before tax). A good time to buy them back, of course, but it is a perilous task and the City will never agree on what is a good price. 175p? 200p? 220p? (All have been cited as 'minimums').

And, if the Roddicks do succeed in their aim of popping The Body Shop into a squeaky-clean, bid-proof foundation - she says her two daughters will get nothing and she hopes to give all her wealth away eventually - what will the company do then? Keep on growing? Or shrink? It is not a daft question, because Roddick herself makes it plain that she thinks a year of 'consolidation' would be good for the company, just concentrating on whether it can improve what it already does. 'You can lose your sense of being remarkable by just being big,' she says. Wanting to be big, she adds, is very much a male pathological trait in business.

Yet that is what many think has already happened to The Body Shop. The initial concept - natural products in reusable bottles with minimal packaging - was, she admits, a great idea which she and her husband used to surf the retail wave of the '80s probably better than any other shop-chain outfit. (It's no good asking her why them? It was just the right idea at the right time, coupled with her belief, shared with Sir Terence Conran, that running a restaurant is the best training for any potential retailer.) Now competition is much tougher. Yet still the Roddicks are pushing it on. Last year Gordon Roddick answered critics who said the enterprise had lost its USP by equating The Body Shop with McDonalds: ubiquity of product and a host of me-too rivals had never stopped America's biggest hamburger chain, so why should it stop The Body Shop? If the relationship with the customer is right, it can grow and grow.

The Body Shop and McDonalds? The problem is that the image The Body Shop fosters as an anchor for that customer relationship is anti-big business, and Roddick herself clearly finds this paradox very uncomfortable. Her priority, she stresses, is neither profit nor personal gain - she and Gordon pay themselves around £122,000 each, and their managing director gets nearly twice that. Instead, she wishes to use her empire as a force for good (or if you disagree with her politics, a force for change).

She put it succinctly in a speech she made to the International Chamber of Commerce in Mexico (she gave me a copy): 'We want a new paradigm, a whole new framework, for seeing and understanding that business can and must be a force for positive social change. It must not only avoid hideous evil - it must actively do good.'

Hence, presumably, the 'Boycott Shell' posters all over The Body Shop's office windows, hence the links to Greenpeace and Friends Of The Earth, hence the insistence that staff work in charity and community projects, hence, too, the investments made into enterprises like the The Body Shop's Easterhouse soap factory in Glasgow, which was deliberately set up in 1988 in an area of high unemployment, even though the cost of making soaps there is around 30% more than buying them in from overseas.

The commercial benefit, she goes on to explain, is that people want to feel good about what they are buying, and will pay more if they feel it is going to a good cause. But that's obviously just a line peddled to the City. It seems far more likely that she simply wants to put Body Shop money behind causes she personally believes in and is not the slightest bit interested in whether investors think they are getting value or not. The idea that profit should be the only corporate goal is, she says, just bunkum.

And many would support her on that. 'Who wants another bloody faceless cosmetics company?' she asks. 'If I thought I had worked 20 years in this company and it would end up an Estee Lauder, I would pack up and go home today.' Quite right.

The problem is that it is hard work to keep convincing your customers that you are still doing it differently to everyone else and stop the message getting garbled internally. For it is not just investors that get their noses put out of joint: around 90% of the 1,200-plus Body Shops worldwide are franchise operations.

In the past some have been less than enthusiastic about Roddick's passions, leading to friction between head office and a minority of franchise holders. The typical franchisee - young, well-educated, female - generally signs up to The Body Shop because she shares Roddick's ideals and wants to be part of the 'family' concept. A few profit-hounds, however, do creep under the fence.

They gripe that communication with head office has worsened as the company has grown and that margins have slumped below reasonable levels. Roddick shrugs. 'Some of the franchisees are chagrined because the money is not so good now, it's bloody hard work.' Others in the empire are more scornful of the gripers, pointing out that the whole point of The Body Shop is that it is about more than just profit. 'If they don't like it, why are they doing it? Let them go and run a McDonalds,' one franchise holder told me without irony. But it must be difficult to get the balance right, especially when times get tough, and the boss sometimes seems to have her head in the clouds.

Has she ever sacked anyone? Roddick looks taken aback. 'Yes, once. I don't employ many people personally, I guess I am, er, sheltered on that.' Is it easy working with her husband? Yes, she says, adding that she sometimes wakes him in the night when he is at his most vulnerable and pesters him with an idea. 'When I feel I need him on my side I hit him with it. We are so strong together it is magnificent.' Otherwise, she reckons, laughing, he would probably prefer not to see her most of the time. 'As we get older he finds me more irritating, radical and loud-mouthed.'

Does she still enjoy her work? 'Yes, I adore it.' Yet again and again, she talks about packing it in. Describing what she calls the 'delinquent mentality' of the entrepreneur - herself - she says her life in the company is chaos at the moment. She doesn't know her job title (she rushes out the room to find out: it's 'founder and chief executive officer', apparently). Then, she adds, shaking her head: 'An entrepreneur in a company so big and bureaucratic, it's like death.' So why doesn't she leave? She is rich enough (she and Gordon have around 22 million shares each in the company, a big house outside Arundel, Sussex, another in Scotland), she is angry enough; there is clearly lots about running The Body Shop she doesn't like. So why not do something else? She smiles. 'What, fire myself? No one else would employ me.'

Anyway, that's missing the point. Not only does she still have big plans for what the company can achieve, especially in terms of changing perceptions about what companies should and shouldn't do - the next plan is to launch a 'new business academy' running MBA-style courses in 'socially responsible business' - but she is also very good at what she does, getting publicity for the company, sorting out new products, pushing out ideas, getting the aesthetic feel of everything just right. People tend to forget that, behind all the upfront politics, she has always been sharply commercial.

She shows me some mock-up posters for male face products that an ad agency drew up which feature two men laughing at each other. She rejected them as too camp and likely to alienate her heterosexual customers. She rolls her eyes. 'God, it's like something out of It Ain't Half Hot, Mum, I said to them: "Give me a break".' An interesting decision for someone who prides herself on being right-on.

But there is always that conflict between the entrepreneur and the structure that chains them down. Roddick, you feel, much as she wants to drive the company, also wants to escape it - which she does with her brief to travel the world looking for new products. She equates it with her early experience as a teacher. To get on as a teacher, she says, you had to give up teaching and become an administrator. It's stupid.

Anyway, where else would Anita Roddick get the platform she so enjoys using? As if to prove the point, she slips out of the room to get a video of two ads she has made. She might put one on TV this month to mark The Body Shop's 20th birthday. The ads celebrate women's wrinkles. The first features the same, rather self-regarding shot of Roddick that irritated so many in the recent American Express campaign, the second doesn't. To be fair, most of the ads are full of shots of other women. Both carry voice-overs implicitly denouncing the beauty business's obsession with youth. They are tagged, portentously, with the words 'Anita Roddick, founder of The Body Shop'.

'I'm not going to use the first. What do you think of the second?' she asks.

'It would be better,' I say, tentatively, 'without the Anita Roddick line. People will say you're on an ego trip.' 'But I'm not using the first one.' 'No, the line saying Anita Roddick. Just say The Body Shop ...' She looks either confused or disappointed, I can't make out which.

Driving home, I wonder if I said the wrong thing. The problem with people who proselytise is that they hate being told what to do.

 

BIOGRAPHICAL NOTES

1942 - Born 23 October, Littlehampton, Sussex

Educated Maude Allen Secondary Modern School for Girls, Littlehampton, and Newton Park College of Education, Bath

1962-71 - Travelling and teaching

1971-76 - Runs small hotel and restaurant with husband Gordon Roddick

1976 - Opens first Body Shop in Brighton, then borrows money to open second in Chichester

1984 - Floats The Body Shop on stock market and wins Veuve Cliquot Businesswoman of the Year Award

1987 - The Body Shop named company of the year by the CBI

1988 - Awarded OBE for services to industry. First Body Shop opens in America

1992 - Wins Business Leader of the Year Award from the national association of women business owners in America

1995 - The Body Shop confirms rumours that the Roddicks plan to buy the company back from shareholders. 

Anita Roddick's famous quotes

'If you think you're too small to have an impact, try going to bed with a mosquito.'

'If you do things well, do them better. Be daring, be first, be different, be just.'

'Since the governments are in the pockets of businesses, who's going to control this most powerful institution? Business is more powerful than politics, and it's more powerful than religion. So it's going to have to be the vigilante consumer.'

What people say

'She is clearly not comfortable dealing with the City and the sort of people who work there. But that's fine. I deal with Gordon Roddick and Stuart Rose, and they give just as good answers. And I actually believe what she is doing in trying to take the company private is utterly genuine.'

A retail analyst on Anita Roddick's relationship with the City

'She is a highly emotional person, which made board meetings rather peculiar. If she liked something, she would jump up and down and scream and clap her hands. But if she didn't she would dismiss it as "f-ing boring".'

A former Roddick associate

'She dreams and I try to make those dreams come true.'

Gordon Roddick on his business relationship with his wife

'It's like being part of a circus parade. When you work for Anita, your job is to follow behind the elephants and scoop up the dung.'

A former Body Shop employee

'Yes, we knew about the plans to take the company private before the press got onto it. We are a family and the Roddicks have been talking about it for years.'

A Body Shop franchisee on the "surprise" over the buy-back plans.

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