Body Shop seeking new retail allies

STRUGGLING High Street health and beauty retailer Body Shop is in talks with major UK department stores over a possible tie-up that will see its products sold in their stores.

Talks are understood to be at an early stage, with Debenhams and House of Fraser as likely candidates. But one analyst said that a deal would be fraught with problems - 'Existing franchisees are certainly not going to be happy.'

New bosses Adrian Bellamy and Peter Saunders, who turned around the underperforming Body Shop operation in the US, replaced co-founders Anita and Gordon Roddick and chief executive Patrick Gournay as chairman and chief executive in a shock boardroom shake-up last week.

The team plans to overhaul Body Shop's cosmetics with a major relaunch towards the end of the year. 'We are not removing old favourites,' said Saunders. 'We are analysing our product range carefully. New products make sense for customers.'

Immediate plans will see a facelift for Body Shop's High Street stores. The trademark green shopfronts will remain 'for the meantime', but shop windows, marketing, promotions and in-store sampling will be redesigned. Operations such as supply chain management will be tightened.

The City has lost interest in Body Shop in recent years, not least because over half the shares are owned by just three people - the Roddicks and start-up investor Ian McGlinn. But Bellamy countered: 'The first task is to get the bottom-line performance up so that analysts start paying more attention.'

The boardroom shake-up came after takeover talks fizzled out. Chief executive Gournay quit and the Roddicks stepped down as co-chairs. They remain as non-executive directors of the company they founded in 1976. Anita Roddick will become a consultant.

The door to a takeover remains open, Bellamy insisted this weekend. ' Obviously if someone approached us with a serious offer we'd be bound to look at it,' he said.