Corporate Close-up; The Body Shop (chart) BODY SHOP MARCHES TO ITS OWN DRUMMER BUT COMPETITORS PUSH IT NEARER STANDARD MARKETING

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In the movie "Singles," a man approaches a woman in a bar and says he wants to meet her but doesn't want to "come up with an act." Her response: "Not having an act is your act."

The same could be said of the Body Shop, where an aversion to lavish packaging, a refusal to advertise and a loudly proclaimed commitment to social causes are part of the company's image.

During its first 18 years, the Littlehampton, England-based retailer found it could avoid advertising by communicating with customers directly through lavish window displays, catalogs and point-of-purchase product descriptions. Even tours of its headquarters 50 miles south of London contribute to the image, with 100,000 people per year forking out $5.30 each to see the company's research and manufacturing operations in action.

But confronted by growing competition and sluggish sales in its older markets, the Body Shop and its highly visible founder-CEO Anita Roddick seem to be more aware of the need to aggressively market, with the company's first advertorial hitting newsstands this month.

The Body Shop's personality has been shaped by the larger-than-life image of Ms. Roddick and the publicity she encourages as she travels Africa, Asia and Latin America foraging for indigenous secrets she can incorporate into Body Shop products.

Significantly, by raising a wide range of social and environmental issues, the Body Shop targets and speaks to specific consumers who buy personal-care products at 1,136 stores in 45 countries. The typical customer is a 29-year-old female, likely to be interested in the retailer's philosophy and practices: its aversion to selling products tested on animals, its in-store petitions aimed at protecting endangered species and its attempts to assist developing countries through business partnerships.

But a pressing concern is whether the Body Shop's wares can maintain their cachet against the onslaught of natural-style products from companies ranging from supermarket chains to L'Oreal. The French beauty marketer's new Planet Ushuaia line of deodorants, shampoos and other products even copies the bright colors of the Body Shop's product packaging and includes exotic ingredients. Procter & Gamble Co.'s entry into the natural derby is Ellen Betrix, a German company that introduced Essentials natural earlier this year.

Despite the boom in natural personal-care products, Body Shop managers say its corporate philosophy allows the chain to continue to distinguish itself.

"A lot of our customers shop with us because they share those same values," said Angela Bawtree, Body Shop's head of investor relations. "It is not simply a question of buying a bubble bath."

Despite its success in launching new products with no advertising, there are signs that the Body Shop's resistance to advertising is weakening. Ms. Roddick recently appeared in an American Express retail ad campaign, through Ogilvy & Mather, New York, in a series that included Crate & Barrel President-CEO Gordon Segal and Toys "R" Us CEO Charles Lazarus.

The company also paid an undisclosed amount to run an eight-page advertorial in the November issue of Marie Claire about the "Body Shop Book" on personal-care techniques and products.

"It would be wrong for people to think we have some kind of moral problem with using advertising," Ms. Bawtree said. "But using glamorous images or miracle cure claims-those kinds of things you won't see us doing."

The company said there are no plans to hire an ad agency. Still, one London analyst who asked not to be identified said, "They always used to say they would rather cut off their right hand than advertise. But now it is something they would consider doing."

For now, Body Shop continues to attract customers by relying largely on its socially conscious image. But that image recently came under attack in a highly critical article in the September/October issue of Business Ethics, a Minneapolis-based magazine that accused the company of overstating its environmental record.

The Body Shop's response?

"They obtained our mailing list under false pretenses and sent a 10-page letter to all of our subscribers attacking the article," said Marjorie Kelly, publisher and editor in chief of Business Ethics. Ms. Bawtree confirmed the Body Shop sent the letter, but denied hiding its identity when getting the list through a consultant.

The Body Shop is expanding rapidly, opening 150 stores a year, mostly in the U.S., Japan and Europe. But it has felt the heat of increased competition in older markets. Same-store sales in the U.K., its most mature market, declined 6% in the year ended Feb. 28, 1993, and were flat in the following year. There are also concerns that, because the Body Shop is 89% franchised, it is becoming more a manufacturer and wholesaler than a retailer.

But NatWest Securities in a recent report expressed "confidence that the international growth potential [over 2,000 stores in the year 2000] cannot only be realized, but also translated into healthy profits," and up to 20% annual growth in five years.

However, Franklin Research & Development, a Boston-based investment adviser that deals only in socially responsible companies, recently sold its 50,000 shares of Body Shop holdings. "We were concerned about some of the competition they were getting and that same-store sales were weak and that they were depending on franchisees for future growth," said Joan Bavaria, Franklin president.

But Ms. Roddick has always espoused non-traditional thinking: "The way we work is quite simple," she has said in public appearances. "We run in the opposite direction to the rest of the cosmetics industry."

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