Body Shop upbeat despite fall in sales

Body Shop International, the cosmetics retailer, tried to remain optimistic yesterday, despite announcing a significant fall in sales at its annual general meeting.

Although Body Shop managed to increase total retail sales by 3 per cent in the first quarter, helped by new store openings and a strong performance in the Asia Pacific region, the company also revealed that its worldwide like-for-like store sales were down 1 per cent.

Sales at stores open at least a year fell 4 per cent in Europe and the Middle East in the three months ended 1 June. Sales dropped 2 per cent in the UK and Ireland and slid 1 per cent in the Americas.

A spokesman said the fall in sales was not due specifically to a poor performance by the company. "The comparable sales figures reflect a general decline in the cosmetics industry as a whole. Our competitors [such as Bath & Body Works] have also been experiencing difficulties," he added.

Body Shop hopes that the introduction of a new range of make-up, to be launched in August, would "revitalise sales" and make the company "more attractive to consumers".

But the group, which has struggled for some time, admitted it was facing 'significant challenges'. The spokesman said the group needs to "strengthen the supply chain, ensuring that all outlets were well-stocked, in order to meet consumer demands".

Body Shop is also finding it tough to compete in America and Japan.

Adrian Bellamy, the chairman, told shareholders that the trading outlook for the year was positive, depending on how quickly "better execution could be implemented".

The update had minimal impact on the stock market. Body Shop shares fell 1.5p to 107p.