29 August 2001

High St chain's idealism masks a harsh reality

Amid reports that Anita Roddick is about to sell off her 300m Body Shop empire, award-winning NBC producer Jon Entine talks to workers who claim the High St chain's idealism masks a harsh reality

The scent of patchouli filled The Body Shop as the crowd gathered. Gucci-clad women and girls in designer jeans were buzzing and breathless, awaiting a special visit. When Anita Roddick finally arrived at this exclusive mall near San Francisco to open yet another of her stores, the crowd surged to greet her. Though she was surprisingly small, there was no denying the size of her reputation and the welcome for the woman hailed as The Mother Teresa of Capitalism.

Anita delivered a rousing version of a speech she calls Corporate Responsibility: Good Works Not Good Words. 'I would rather promote human rights, environmental concerns, indigenous rights, whatever, than promote a bubble bath,' she said.

For the first and only time, I was allowed to ask her a question. I cited a version of her speech, given in 1993, in which she called for a boycott of China. 'How do you square your call for a boycott when The Body Shop sources dozens of products from China? According to fair trade organisations, you have personally rebuffed pleas to switch to more ethical sources.' She shot me a look. 'You just don't understand, do you? I was talking about what business should do, not what we actually do. My job is to inspire. But we have a bloody business to run.'

It is this 'bloody business', the oxymoronical ethical multinational empire, that intrigued me for years. This month, Roddick, 59, and her husband, Gordon, bought out The Body Shop's American joint venture partner for 7.9 million making insiders wonder if she plans to sell the company so she can spend more time protesting at world summits. A report in a business paper last week suggested that she could expect to receive 300 million from the sale.

Roddick thrives on the global forum and has used it to highlight The Body Shop's formula for success. While traditional cosmetics firms offer beauty in a bottle, we are led to believe Roddick is selling us idealism and hope for a better world.

Yet the world she inhabits is much less ethical than I ever imagined when I first looked into the company in 1993. By then, Roddick had become a renowned gadfly, promoting the latest politically correct cause: saving whales, rescuing rainforests. She boasted of pioneering trade links with Third World producers, from Amazonian Indians to paper makers in Nepal. Women idolised her for her caring, feminist business ethic and duly snapped up her products.

I chanced upon the Body Shop story in the summer of 1993. I was sitting in my office, then at ABC News, when an unsolicited call came from a woman identified only as 'Erica'. 'My sisters and I are franchisees of Body Shop,' she said. 'Anita runs a company that contradicts everything she claims to be about.' 'I've read glowing profiles of the Queen of Green,' I replied. 'If you have any real evidence, send it.' I was sure I would never hear from her again. A week later, I did. Erica called back with her twin sister, Andrea.

'We can't supply you with documents,' they said. 'We are negotiating to sell back our franchise, and Body Shop has warned us not to talk. But there is a network of employees and franchisees around the world that know what's going on.

You'll hear from them.' My answering machine was bombarded with messages.

'I was Body Shop's first franchisee in France. In Paris, they picked up plastic bottles and dumped them in landfills.' '

Hi, I was director of environmental affairs for The Body Shop . . . Their environmental programmes are just window-dressing.'

Within days, I had talked to a score of employees about the betrayal they felt. 'It's a lot worse,' said a former Body Shop systems manager, 'when you find the robber who's been stealing from you is the local cop.' One employee sent a speech in which Roddick boasted she 'gives most of our profits away'. It was stapled to financial records which showed Body Shop International hadn't given a penny to charity over its first 11 years.

Over the past decade, Body Shop has had to pay out tens of millions to buy out dissident franchisees or settle actions. But a company spokesman said: 'These are a handful of franchisees representing a very small minority.

Occasional disputes with franchisees are part of the ordinary course of business for an international franchised company. The Body Shop continues to enjoy a positive relationship with the vast majority of its franchisees.' Anita's first autobiography was full of photographs of her with Third World workers making goods for The Body Shop.

There was also a picture of a sign in her office: 'The Body Shop is the most honest cosmetic company in the world.' The dichotomy between rhetoric and reality deepened my interest. I set out to find out how 'compassionate capitalism' had turned so dark.

One vital source was Aidre Vaillancourt, Anita's best friend when she opened her first shop in Brighton in 1976. There are now more than 1,800 worldwide. When Aidre contacted me in 1995, she and her husband had recently lost four franchises after a bitter dispute with Anita. 'It was a disaster,' recalled Aidre. 'We couldn't fight their legal machine. We just went bust.'

Where was Anita? 'That's what I kept asking myself.' The Body Shop tale began in 1970 in Berkeley, California. Anita and Gordon were travelling when they saw a tiny shop run by Peggy Short and Jane Saunders. Its name, The Body Shop, was a pun: it was based in a former car repair garage. It offered an innovative beauty line and scented oils and lotions by the ounce.

Anita thought it a great idea. It wasn't until 1976 that she, with Aidre's help and a 4,000 bank loan, opened her Body Shop in Brighton. She stacked the shelves with exotic-sounding potions in small plastic bottles with hand-written labels. Aidre and Anita were soon able to open a second shop. Aidre ended up owning four shops before the roof collapsed on her as it did for so many other franchisees and she and Anita became bitter enemies. From a peak of 3.70 in the early Nineties, 'the shares that defy gravity' slid to 71.5p by March this year.

But in the early stages, the company thrived on Anita's exuberance. Eager to expand in the Seventies, Anita looked up 'herbalist' in the Yellow Pages and came up with Mark Constantine, a 'trichologist' who developed hair dyes. He was taken aback by the mediocre quality of the original Body Shop products. They were filled with synthetic preservatives and dyes. 'Roddick couldn't care less about ingredients,' he says.

When ideas for new products flagged, they would secretly turn to The Body Shop in California. One was a facial scrub made from ground adzuki beans, named Japanese Washing Grains by Anita. The truth is more prosaic. It was originally called Korean Washing Grains a Korean had given the Californian shop her recipe for a facial scrub. The proprietor of a food shop across the street from Roddick's Brighton store said he supplied her beans.

In 1987, the Roddicks bought the rights to the Body Shop name from Peggy and Jane for $3.5 million (2.45 million). I contacted the management of the Berkeley store, and an executive gave me its brochures from 1970-76. Roddick's price sheets were strikingly

strikingly similar. 'All our products are biologically soft and made to our specifications; bottles 20 or bring your own,' said the Berkeley version.

'All our products are biodegradable and made to our specifications; bottles 12p or bring your own,' said Anita's. The Berkeley shop sold lemon oat cleanser Roddick advertised lemon oat facial lather. Four O'Clock Astringent Lotion became Five O'Clock Astringent Lotion.

The Body Shop spokesman denies Roddick took the ideas from the California store and claims there are 'fundamental differences' between the stores. But the Berkeley executive told me: 'We only pieced this all together after we sold out to them. We were shocked and angry. Peggy and Jane never would have sold them the Body Shop name if they had known what Roddick had done.' The Body Shop's celebrated ethics were questionable from the start.

But for 25 years, the Body Shop myth worked its capitalist magic, with its founder promoting herself as the honest, trailblazing feminist who packages an activist social philosophy in every jar of blusher. 'The Body Shop,' boasts Anita, 'walks its talk.'

Many of Body Shop's fair trading partners shudder at these words. Nowhere are the contradictions of the Body Shop message more explicit than in its dealing with the Nahuu Indians, of Ixmiquilpan, Mexico, who eke out a living selling scrub mitts made from the maguey plant. The Body Shop began taking the mitts in 1992 and said it had begun a maguey replanting programme except that it had been started long before by Xochipilli, a non-profit-making organisation run by Peter Winkel.

Fair trading organisations had worked out a price of $2.20 a mitt, leaving the Nahuu a profit of 17 cents on each. But, says Winkel, Roddick would pay only $2.05 a mitt, leaving the Nahuu virtually no profit.

By 1993, the mitts were one of The Body Shop's most profitable products, and Roddick visited the Nahuu for the first time to film an American Express advert. 'It was bizarre,' says Alison Rockett, a Canadian whom The Body Shop sent to Mexico to prepare for the filming. 'Porta-loos were hauled in. A chef was hired to prepare smorgasbord and fettuccine.' Roddick told the Nahuu: 'I will be getting money for this filming and I want to give it to you. What do you need?' Their requests included a library and a truck.

But for at least 18 months, neither money nor gifts materialised. 'People get so angry,' says Rock-ett, 'but never at Anita. They blame the rest of us.' Even today, Roddick does not grasp how erratic her behaviour seems. 'I always have to ask for permission to go into a market,' she said recently. 'I spend a year or so in that country working with indigenous groups. That's what we did in Mexico.' She says this with no trace of embarrassment.

Winkel recently suggested a small rise in the price of the mitts. 'They told me they could get similar mitts cheaper in India, so I dropped it,' he says. Like so many before, Winkel knew better than to meddle with the Queen of Green.

Copyright 2001 Associated Newspapers