Body Shop founder Roddick accused of a sell-out after £650m cosmetics deal

But businesswoman Dame Anita Roddick has been accused of selling out after agreeing to sell the Body Shop chain she founded to global giant L'Oreal.

Dame Anita and her husband, Gordon, will bank about 117.4 million from their 18 per cent stake, while family friend Iain McGlinn will make nearly 150 million from his 23 per cent holding, after the 652.3 million sale to the French firm, which still tests some cosmetics on animals.

"We think consumers can now show their disgust at this highly unethical takeover," Ruth Rosselson, of Ethical Consumer magazine, said.

It is the end of an era for Dame Anita, 63, who created the iconic store 30 years ago after borrowing 3,000 from a friend. It also marks a watershed on Britain's high streets, as the move towards ethical consumerism that she pioneered comes of age - it now represents 25 billion in total annual spending.

In the past, Dame Anita has declared that most of her fortune will be devoted to charity and environmental causes. When asked yesterday what was she going to do with the money from the sale, she said: "I haven't a bloody clue", before adding that she was going to "have a bloody good next 20 years to do something great ... watch this space".

A trickier dilemma is faced by her customers now that the Body Shop, famous for stocking only sustainable products not tested on animals, is owned by the world's largest cosmetics company. L'Oreal, a corporate behemoth one quarter owned by Nestl, still tests products on animals and it is backing the French government's attempt to overturn a planned European Union ban on such testing.

Ethical Consumer said it had slashed the Body Shop's ethical rating from 11 out of 20 - one of the highest of any major retailer - to just 2.5.

However, Dame Anita insisted yesterday: "It's not selling out, and the assumption that I am sitting next to an enemy is one that is absolutely wrong."

She said L'Oreal was in favour of everything the Body Shop stood for and was even going to take on board the values for which it had fought for so long.

"The most exciting thing is about them asking us to teach L'Oreal about community trade. When the biggest cosmetics company in the world says 'teach us how to support family farmers, teach us how to support women's co-operatives', then you're very happy."

She said the Body Shop would be "ringfenced" from the rest of L'Oreal and customers would not see it as a betrayal. "We are so intimate with our customer. They become the guardians at the gate post."

Fans of the Body Shop may be forgiven for being confused by Dame Anita's decision to sell to L'Oreal. In 2001, she snubbed a takeover offer from rival cosmetics chain Lush, reportedly because she did not believe its founder, Mark Constantine, was ethical enough. She also made enemies within the industry by declaring that expensive anti-wrinkle products - including those made by L'Oreal - didn't work.

L'Oreal, which includes the brands Maybelline and Lancome, heaped praise on the Body Shop and promised no jobs would be lost. Sir Lindsay Owen-Jones, its chief executive, said: "We will maintain the standards and all the values of the Body Shop. We operate in countries where we cannot sell unless the product has been tested - which the Body Shop does not have to do. We are just as convinced that it is urgent and important to put an end to all animal testing in the cosmetics industry."

He went on: "I can't use overnight the Body Shop approach in all of the L'Oreal companies, but our long-term commitment is to join Body Shop on this issue. I cannot be clearer than that."

The anti-fur campaign group PETA welcomed the sale and said L'Oreal could learn from the Body Shop. But others will be harder to convince.

Ms Rosselson said: "It is ironic that a company well-known for its anti-animal testing stance should sell out to one that tests on animals and which has yet to show its commitment to any ethical issues at all. I, for one, will certainly not be shopping there again and I urge other consumers concerned about ethical issues to follow my example.

"Anita Roddick has always been a keen advocate of ethical consumerism. We think consumers can show their disgust at this highly unethical takeover by voting with their feet and their wallets and refusing to further line the pockets of L'Oreal and Nestl. If L'Oreal is really concerned about ethical issues, it can start taking them more seriously within L'Oreal itself."

Chris Davies, an MEP who last year called for a boycott of L'Oreal products, said he was "very attached" to the Body Shop chain but the sale "raised ethical issues" for consumers.

"I am totally against testing on animals, but hopefully the success of the Body Shop will send the right message to large multinational companies about their practices," he said.

Testing of cosmetics on animals is banned in Britain, Belgium and the Netherlands, but an EU-wide ban originally scheduled to come in by 2008 is being stalled by other countries, particularly France.

The Body Shop is just recovering from a period of falling sales, and faces intense competition from rivals who have adopted similar product ranges.

After becoming a high street icon in the 1980s, it struggled to remain distinctive and in 2004 recorded a 13 per cent drop in sales of core products such as papaya body butter and honey shampoo. It managed to recover, and now has more than 2,000 stores in 53 countries.

From a single store to global phenomenon

The Body Shop was founded in 1976, and Anita Roddick opened the first outlet in the English south-coast resort of Brighton, selling toiletries made from natural ingredients such as aloe vera, jojoba oil, rhassoul mud and cocoa butter sourced from the developing world in recycled packaging.

The influence of Roddick led to a uniquely positive stance on the environment, human rights and animal welfare.

Long before other cosmetics companies followed suit, the Body Shop pledged not to test products or ingredients on animals, or commission others to do so.

A refreshing attitude to advertising led to a campaign saying there were only seven people in the world that actually looked like supermodels - and that the average size for women in this country was 14.

The brand has generated enemies in the anti-capitalist movement, who say they are still part of a damaging multinational cosmetics industry, fuelling the consumption of mass-produced and often trivial consumer goods and causing major environmental and social problems.

The Body Shop now has more than 2,000 stores in 53 countries.

The company's total retail sales rose 5 per cent last year to 708.7 million.

Roddick has said she doesn't want to die rich but instead will set up a charitable foundation, through which donations will be made to groups and individuals that show leadership in the areas of global justice, human rights, environmental action and grassroots organising.

Ethical goods winning shoppers' favour

CONSUMERS spend 25 billion a year on ethical goods and services, according to industry estimates - a figure growing 15 per cent annually.

What began three decades ago as a fad for middle-class shoppers has matured into an ethos which permeates almost every new product launch on UK high streets.

While The Body Shop raised awareness of environmental issues and animal testing, ethical consumerism has widened to include groceries, clothing and banking.

Last month, American Express teamed up with the poverty campaigner Bono to launch a Red credit card which allows even the most dedicated high-spenders to feel the glow of philanthropy while passing the shop tills.

Earlier this week, Sainsbury's announced that sales of Fairtrade items in its stores had topped the 1 million-a-week mark, with a rise of 22 per cent - matched only by the parallel rise in demand for organic food.

From just 150 products two years ago, the Fairtrade range has expanded to over 1,500.

Meanwhile, Britons spent around 43 million on ethically-traded clothes last year, prompting Marks & Spencer to offer Fairtrade-certified socks and T-shirts and Top Shop to trial three Fairtrade brands. And the Co-op Bank says ethically-invested cash broke the 10 billion barrier last year.