The Body Shop - what went wrong, and what can we learn from it?

In my role as a lecturer in Business Studies, I am often asked who is my favourite female entrepreneur. My answer is Anita Roddick, founder of The Body Shop, who tragically died in 2007.

Business women like Karen Brady and Jacqueline Gold are often held up as examples of the best British female 'entrepreneurs'. But I would argue that both Brady and Gold were not entrepreneurs at all, having been born with ‘silver spoons’ in the mouths, and given ready-made successful companies to run (with a lot of help from hired managers and business executives!!)

But Anita Roddick was a genuinely successful entrepreneur in the true sense of the word. She opened her first shop in Brighton in 1976, with the goal of earning a small income for herself and her two daughters while her husband was away in South America. This was after experimenting with her own home-made natural products created on her kitchen table. She wanted to provide quality skincare products in refillable containers, sold with truth and integrity, rather than marketing hype.

Her business was so successful that by 1991 the Body Shop had 700 branches, and Roddick was awarded the 1991 World Vision Award for Development Initiative. By 2004 the Body Shop had 1,980 stores, serving more than 77 million customers worldwide. It was voted the second most-trusted brand in the United Kingdom, and 28th top brand in the world.

Many readers of my blog will be aware that recently the Body Shop has run into serious financial difficulties and has ceased all its operations in the USA. At the time of writing it is in administration in the UK, with many job cuts and store closures already announced.

So what went wrong? Can the Body Shop still be saved? And if so, what action needs to be taken to rescue the company before it shuts down altogether?

I recently read a fascinating article on this subject by several marketing academics, and I have reproduced the article below under Creative Commons license.

Darren Bugg
Editor, The Customer Service Blog



We are in an era of brand activism and conscious consumerism. More than 70% of consumers expect brands to publicly stand for socio-political issues.

And more than half of Australians consider sustainability an important purchasing criterion. Experts also predict a major shift in consumer attitudes with sustainability evolving from a “nice-to-have” to a baseline requirement.

In this climate, The Body Shop - promoted as a global beacon of ethical retailing - shouldn’t have failed. However, in February, it entered administration in the United Kingdom. The following month, The Body Shop in the United States and Canada filed for bankruptcy.

The Australian subsidiary remains profitable, boasting about 100 stores. But it is reportedly facing a "cash flow crisis” with “unsustainable levels of debt” following the collapse of its UK parent company.


The Body Shop was once a ground-breaker

Founded by UK businesswoman and human rights activist Anita Roddick in 1976, The Body Shop was a trailblazer of cruelty-free products, fair trade and environmental sustainability.

It was as well known for its advocacy and ethics as its flagship products, including White Musk scent, Dewberry oil and peppermint foot scrub. The brand helped change 24 laws in 22 different countries by mobilising customers to campaign against animal testing in cosmetics. However, The Body Shop’s trajectory over the last two decades diverges sharply from its founding ethos.

The Body Shop sold - and then sold again

The Body Shop was sold in 2006 for 1.26 billion dollars to cosmetics and personal care company L'Oreal. The brand was abandoned by many loyal customers because of perceived betrayal of its core values. In 2017, The Body Shop was bought by Brazilian cosmetics giant Natura for 1.7 billion dollars, which its CEO Ian Bickley promised would start “a new chapter”. Natura then sold the brand to asset management company Aurelius in 2023, just three months before its UK collapse, for only 399 million dollars. This signalled significant value decline and raised questions about the viability of the brand worldwide.


Activism fatigue

Countless brands are vying for marketplace positioning based on social and environmental justice. This saturation of ethical messaging leaves consumers fatigued and they’re likely to tune out.

The most recent Gallup survey shows consumer interest in brands engaging in socio-political issues is waning. What was once an extraordinary point-of-difference for The Body Shop is now seen as standard.

The Body Shop has also faced extreme competition. Brands including Aesop, LUSH and Neal’s Yard Remedies emerged as worthy rivals, leveraging credible ethical branding to attract eco-conscious shoppers.

The Body Shop had the advantage of being the first in its field but the sale to L'Oreal compromised its core purpose and consumer connection. It struggled to recover its founding values and was crowded out by competitors.


Dwindling brand bravery

Our research shows activism must be backed by brand bravery to be credible in the eyes of consumers. In the past, consumers supported activism aligned with corporate values. We found alignment on its own was not enough.

A brave brand considers the greater good, sticks to its core values, defies dominant norms, takes risks to be unconventional and even controversial as a brand and shows resilience to setbacks such as consumer backlash.

When The Body Shop opened in 1976, cruelty-free products and ethical business practices were unheard of. It is now challenged by competitors with more radical claims.

LUSH boldly deleted its social media accounts, citing concerning impacts on young consumers’ mental health. Considering potential revenue loss, as social media is the primary way to reach Gen Z, this was a brave move.


Falling short of true transformation

Recent research shows how important it is for brands to be authentic activists. Brands must practice what they preach. The Body Shop originally did this well but consumer scepticism arose after L'Oreal’s acquisition.

L'Oreal has not tested on animals since 1989 but consumers’ distrust of the company’s ethical standards rubbed off on The Body Shop.

Transformative brands must also lead by example on both business and social fronts. The Body Shop did both in the beginning but neither by the end.

Under Roddick’s leadership, The Body Shop transcended mere profit-making and revolutionised the beauty industry. However, it later became part of faceless global conglomerates and private equity firms. While the brand initially served as a catalyst for change to industry and consumption standards, cruelty-free products eventually became expected of all companies in the saturated beauty market.

As a commercial business, The Body Shop became estranged from its original customer base and failed to meaningfully engage with a younger demographic.

It missed the mark on evidence-based skincare products, which rely on scientific research and formulations - another major trend. Consumers have also traded down to cheaper options, amidst a cost-of-living crisis, as they must prioritise price over ethical claims made by brands like The Body Shop.


Reclaiming an activist brand heritage

What should The Body Shop and other ethical brands do? The UK business is trading in administration but remains “fully focused on exploring all options to take the business forward”.

Our research offers several possible pathways. The Body Shop needs re-energising as a brand leader on product innovation, customer connection and social change. For ethical brands, a shared focus on market and societal goals is essential to be transformative.

The Body Shop must seek to not only reclaim its position as a leader in sustainability but adapt to survive in the struggling retail sector. They could start by rebuilding customer relationships.

The Body Shop has a history of activism. This can continue and it can be more effective in achieving change if it stays relevant and delivers on the brand’s vision long-term.

This means taking risks by adopting innovative and unconventional promotional strategies and updating its messaging to ensure it can attract the next generation of shoppers.

Zoe Lee
Reader (Associate Professor) in Marketing, Cardiff University

Amanda Spry
Senior Lecturer of Marketing, RMIT University

Jessica Vredenburg
Senior Lecturer (Assistant Professor) of Marketing, Auckland University of Technology

This article is republished from The Conversation under a Creative Commons license

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