The Queen of Bubble Bath

She has been called "The Mother Theresa of capitalism". But in the past few years Anita Roddick's reputation has suffered more than a few bruises. The founder of Body Shop has been accused of several unethical business practices including the exploitation of the Brazilian Kayapo Indians.

Jon Entine*

"I'd rather promote human rights, environmental concerns, indigenous rights", whatever, says Anita Roddick breathlessly, as she opens yet another Body Shop, at a mall near San Francisco, "than promote a bubble bath." Roddick is framed by a shelf-full of bubble bath, one of fourteen varieties of soap suds sold by Body Shop; there is not a hint of irony in her voice.

"Anita is a myth-o-maniac," says Mara Amats, a trade consultant who has worked closely with Roddick. Amats, like many Body Shop observers, struggles to understand why such a charismatic business woman continues to make one ethical misstep after another. For years, Body Shop had prospered because of the squeaky-clean reputation of its founder and CEO. Roddick even has long posted a sign in her office proclaiming that "we will be the most honest cosmetic company" in the world. But today, that rags-to-riches-to-Robin Hood corporate myth is in tatters as Roddick and her company struggle with scandal and organizational disarray.

The past few years have certainly been a reversal of fortune for the Body Shop which had known only exponential growth and fawning publicity for most of its history. With the help of a $6,000 loan, Roddick opened a tiny cosmetic shop in 1976 in Brighton along England's south coast,. She catered to the hippie counter-culture, selling "natural" shampoos and lotions and offering "one-stop" ear piercing. Much to her surprise, her cash register rang madly. A decade of spectacular international expansion followed.

In the late 1980s, Roddick expanded her "green" brand image by associating herself with social causes including an opposition to animal testing, recycling, promoting AIDS awareness, human rights. The centerpiece of Body Shop's marketing efforts, however, was the rainforest promotion with the Kayapo from whom she sourced a tiny amount of nut oil for her hair conditioner. The media loved her. Before long, this eccentric and outspoken entrepreneur emerged as the world's best known feminist business leader. "The Mother Teresa of capitalism," she was called.

Roddick's socially responsible reputation became a gold mine. Body Shop is now a multinational beauty company with 1,407 shops in 45 countries, and a billion dollars in retail sales. Roddick herself has amassed a fortune estimated at more than $200 million. She owns a castle in Scotland and a flat in London, and her husband Gordon, Body Shop's Chairman, flies his favorite polo ponies around the world on a chartered airliner. But despite its enormous financial success, the Body Shop empire is beset by scandal and losses in its key US market.

Until a few years ago, Body Shop's generated dozens of enthusiastic stories every year about its innovative, socially conscious, activities. Consumers were willing to pay a hefty premium for its commodity products because they believed its cosmetics were high quality and natural, and that it practiced social responsibility consistent with what it preached. But the image shattered irreparably in September, 1994 with the publication of my article "Shattered Image: Is The Body Shop Too Good to Be True?" in the US magazine Business Ethics. It detailed dramatic contradictions between BSI's idealistic public image and its operational practices, questioned the company's ethical reputation and challenged Anita Roddick' honesty, if not her sincerity.

"Shattered Image" documented that the company stole the Body Shop name and marketing concept, fabricated the origins of key products, misrepresented its charitable contributions and fair trade programs, and has been beset by employee morale and franchise problems. Moreover, its lotions, shampoos and fragrances were never "natural."

The breadth of misrepresentation is startling and covers every dimension of its operations. A few of the low-lights:

"Natural" Products:

Despite the green hype, its products are lackluster and drug-store quality. BSI uses only microscopic and ineffective levels of botanical extracts and combines them with extensive amounts of petrochemical ingredients such as isopropyl myristate, petrolatum, and triethanolmine. As recently as January of 1996, a Danish lab found two of its best selling products filled with formaldehyde, confirming findings by Oko-Test, a leading German consumer magazine. In April, the international trade publication Women's Wear Daily quotes an industry consultant as saying "You can't offer low-end products at a premium price, which is where they [Body Shop] are at."

Charity:

Rather than giving away "an inordinate amount of pre-tax profits to charity" as Roddick claimed, the company had given zero dollars to charity over its first 11 years and gave far less than the average company over its entire history.

Franchising:

Ninety percent of Body Shop's stores are franchised. In effect, it is an international wholesale operation in which its franchisees assume most of the risk of expansion. It's also led to huge problems: Recent franchise suits in Israel, Singapore, France, Canada and Norway have resulted in more than $10 million in settlements. The US Federal Trade Commission launched a 16-month fraud investigation of Body Shop. While the probe was ongoing, Body Shop revamped its franchise financial documents and all but ended expansion in the United States, where it has lost money for two years running.

The Body Shop's vaunted Trade Not Aid promotion is particularly misrepresented. Gordon Roddick calls fair trade the "cornerstone" of the company. It is a tiny cornerstone indeed: according to its own statistics, fair trade represented less than 0.16% of turnover when my exposés appeared. Kirk Hanson, a Stanford University business lecturer hired by the company as a consultant characterizes its trading schemes as "small and few in number" and says they have not been forthrightly promoted.

The problems with the Brazilian Kayapo project described by Saulo Petean are just the tip of the iceberg. Its micro-projects with the Pueblo Indians in the US and with natives in Tanzania and the Solomon Islands have been grossly exaggerated and beset by problems. Pauline Tiffen, who linked the Body Shop up with the Mexican Indian natives who were the subject of Body Shop's advertising campaign with American Express, has a harshly blunt, but not uncharacteristic observation. She calls Roddick "schizophrenic" and "sociopathic... She took the project we set up and tried to subvert it," according to Tiffen.

In January, its shea butter project in Ghana became BSI's latest trade scheme to hit the headlines. The Toronto Globe and Mail, in an article entitled "Grief in Ghana" reports that Body Shop contracted to buy huge amounts of shea butter, only to renege, leaving the local economy devastated. Trade experts say it's a now familiar pattern.

These problems are not just the mistakes of over-enthusiastic idealists. A particularly revealing story is Body Shop's first fair trade program. In 1987, Roddick began sourcing foot massagers, which she calls "footsie rollers", made in India at the Boys Town orphanage. In the early 1980s, when Richard Adams was head of the fair trade company Traidcraft (UK), he sourced a different Boys Town product, wood carvings. He soon discovered that Joe Homan, the project's director, was sourcing the carvings from sweat shops and was molesting the boys. He kept the police at bay by using a slush fund kept full by church agencies that were innocently sending him money.

When Adams found out that the Roddicks had linked up with Homan, he was horrified. He immediately advised them of the problem. "I never heard back," he says. Two alarmed members of the Catholic order which had kicked out Homan years before also visited Roddicks at their home. Still, nothing was done.

"Gordon was aware of Homan's reputation," writes Anne Downer, the former Body Shop head franchisee in Singapore, in a signed, legal affidavit. At the Roddicks invitation, Downer had accompanied the family in India for the dedication of Boys Town. "I slept in accommodations close to where some of the boys lived," writes Downer. "I was approached by one of the assistants to the project. He informed me about Homan's behavior and the sexual molestation. He was concerned and extremely anxious that I inform Gordon and Anita. I remember Gordon saying: "We've heard those rumors, but I don't believe it." Downer continues: "He didn't seem unduly concerned and didn't seem to take it seriously."

Over the next few years, as Homan went about stealing charity funds and buggering orphan boys, the Roddicks sent out glowing reports to their franchisees. One idyllic account in 1989 reads: "Joe's work in Boys Town is ceaseless; he cares for the boys and girls and they really appreciate what he is doing for them." The roof caved in the next year when the story broke in the English and Indian press. The Roddicks first tried to suppress the story and then tried to turn it into a public relations advantage. "This story has not hit the.press yet, but could erupt at any time," read one memo to employees and franchisees. "It is important that you know your facts. Anita....blew the whistle on Joe."

Many journalists, trade experts and social activists who have interacted closely with Body Shop have come away shaken. Geoffrey Brooks, president of Brooks Pharmaceuticals, which has processed the corn protein bought from the Pueblo Indians for use in Body Shop's blue corn `Trade Not Aid' line, calls Roddick "a modern day colonialist." Stephen Corry, director of Survival International which once had a joint promotion with Body Shop, now calls the company "sleazy" and "no more ethical than heap of beans."

The ethical contradictions begin with the very founding of the company. According to Anita Roddick's friends and colleagues, she stole the company name, many of its product ideas, and its marketing tactics from a California company, also called The Body Shop. The California store was founded at the height of the hippie revolution in 1970 six years before Anita started her Body Shop, and the same year that the Roddicks visited the San Francisco bay area where the stores were located.

The misrepresentations don't end there. Two of Roddicks earliest partners, cosmetologist Mark Constantine and Janis Raven, head of Bubble Publicity who ran the Body Shop's public relations for seven years, contend that almost every one of Roddick's romantic stories about how she "discovered" her ingredients in visits to native lands was fabricated.

"What we were looking for was unusual ingredients," Raven remembers. The [pineapple] facial wash, you know, we talked about Anita Roddick going to Sri Lanka and seeing the women rubbing pineapples over them. You know, that kind of nonsense." Why was it nonsense? "Because it wasn't true. That was Mark's information and we just decided to make it a bit more romantic."

Michael Johnson, former editor of International Management magazine calls Body Shop a marketing fraud. He was threatened by Gordon Roddick in 1986 when he provided the first public details of its California hijack. "The Body Shop is a gangsterish operation hiding behind a veil of social responsibility," says Johnson.

That veil is there no longer. Today, the ethical realities of the Body Shop have been the subject of media and academic reports around the world. Moreover, Body Shop has lost many of its once loyal backers who remember the earlier, more innocent days.

"I was the first person who would have remained loyal, says Janis Raven with almost no bitterness in her voice. "It was a company we all built together. But Anita Roddick has no loyalty to anybody. Everybody is a slave, a new slave of the month comes around and you get dumped in favor of them."

"You know," Raven says, "Anita's gone a little bit over the top. She just disappeared up her own backside. She started to believe her own publicity and this is always the death knell to anybody. We used to joke that I've created a Frankenstein. If you start believing all this stuff that is written about you, you have got to go dotty, haven't you?"

Mark Constantine is sad about the turn of events. "I used to say to Janis, `can't you do something about Anita?'" He erupts in a characteristic laugh then sighs, thinking back to those bloody fun early days, mixing weird potions in his kitchen while Anita and Gordon looked on like eager kids in a candy store. "There is still a mass of innocence to those two despite it all."

Even with all the mounting problems, no one can take away Anita Roddick's success in building her cosmetic empire. She has amassed a fortune of almost unimaginable proportions. But when the history books are written, she is not likely to be remembered by today's public persona as the world's most socially responsible entrepreneur. Even if the Body Shop should retool its ethical framework, it is a company built on the shaky financial prospects of its franchisees and the betrayed expectations of its idealistic employees and customers. Anita Roddick never could decide whether she wanted to practice her social vision or merely exploit it.

"She stands full square between Esteé Lauder and Elizabeth Arden," says Constantine. "They all wrote their own stories." Anita Roddick is one more beauty baroness who created her own myth to make her entrepreneurial dream come true. So ultimately, Anita is the baby boomers New Age queen of bubble bath? "That is exactly it. That's exactly it."

*Jon Entine is a maverick journalist who specializes in business ethics, race and sports. His investigation of UK-based The Body Shop cosmetic company was awarded a National Press Club award in 1995. He has also written extensively on Ben & Jerry's Homemade for deceptive marketing and for sourcing Brazil nuts for its flagship Amazon "rainforest" ice cream from some of Latin America's most notorious agri-businesses.

His recent articles have focused on cause-related marketing, ethical investing, corporate governance and social responsibility for both the popular and academic press. Entine has also won more than a dozen major awards for his television reporting with ABC News and NBC News, including two Emmys for documentaries on reform movements in China and former Soviet Union. Entine lectures on business and journalism ethics. He is also finishing a book for Macmillan on why blacks dominate sports, based on his award winning NBC documentary Black Athletes: Fact and Fiction.

Entine lives in Columbus, Ohio with his wife Ellen Turner, a marketing executive, and his loyal dog Apollo. He can be reached by E-mail at: runjonrun@earthlink.net