Body Shop brightens retail gloom

THE Body Shop has offered up some light among the retail sector gloom, with a suprisingly good sales performance.

The eco-friendly bathroom products chain said that recent sales at its UK stores had jumped 9%. It gave an upbeat forecast for its operating profit growth for this year of 15% to 20% as it reported annual results in line with market expectations.

Body Shop shares rose a startling 13.5% this morning: 22¼p up at 187¼p, reflecting relief in the City that the company hadn't succumbed to the slowdown affecting many other High Street retailers.

Today's results are particularly welcome to a retail sector that has been labouring under high interest rates and consumer confidence depressed by an uncertain housing market.

B&Q group Kingfisher yesterday issued a shock profit warning which seemed to confirm the worst worries of retailers about the state of consumer spending.

Today's news represents the latest stage in a turnaround for The Body Shop, which has been on the back foot for several years. At Christmas it defied the generally listless High Street with a 6% surge in sales.

And profits for last year came in better than expected, after a £100m investment plan to update its stores and systems helped the group to ensure it got popular ranges into its stores in time for Christmas. Operating profit for the 52 weeks to 26 February £36.2m, up 19% on last year.

The group has struggled to maintain sales growth in recent years, particularly in the UK. But today it unveiled a 9% lift in current trading at UK stores trading for more than 12 months, excluding sales through pharmacy concessions.

Body Shop now has some 2,000 outlets worldwide, of which more than 300 are in the UK.

Dame Anita Roddick and Gordon Roddick set up Body Shop in 1976 with the aim of 'encouraging women to focus on self-esteem and social and environmental causes'. She stepped down as chief executive in 1998 and as co-chairman, along with her husband, in 2002. The couple still hold around 15% of the company's shares.