Body Shop

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Submitted by to the category Business and Industry on 12/04/2012 04:47 PM

CASE SUMMARY

The Body Shop International PLC is the manufacturer-retailer company and it’s was one of the successful company in the late 1990’s. Anita Roddick is the founder of The Body Shop International and she stepped down as CEO in 1998. The company had a good performance of annual revenue growth rate of 20% in early to middle 1990’s but it was slowed to around 8% in late 1990’s. This is caused by the strong competitive from the new retailers of the naturally based skin and hair care products entered the market. The Body Shop failed to maintain its brand image in the market like before when it expanded into almost every mall in America and every corner on Britain’s shopping street.

After Anita Roddick stepped down as CEO, Patrick Gournay came abroad to replace the position as CEO. However, in fiscal year 2001, the revenue grew 13% but the profit before tax (pretax profit) declined 21% and it’s was under the expectation. To overcome the problem, Gournay implemented new strategies to improve the product.

The objective of the strategies:

i. To enhance the body shop brand through a focused product strategy and increase the investment in stores

ii. To achieve operational efficiencies in the supply chain by reduce the product and inventory costs

iii. To reinforce their stakeholder culture. Anita roddick, the founder co chair of the board of director

Patrick Gournay looking for the assistance in short-and long-term planning for future earning and financial need of The Body Shop to overcome the company’s problem.

FORECAST OF INCOME STATEMENT & BALANCE SHEET

FOR THE YEAR ENDED FEBRUARY 28, (2002, 2003, 2004)

| 2002 | 2003 | 2004 |

| GBP | GBP | GBP |

INCOME STATEMENT | | | |

| | | |

SALES | 422,733 | 477,688 | 539,787 |

COGS | 160,639 | 181,521 | 205,119 |

OPERATING EXPENSES | 211367 | 238844 | 269894 |

INTEREST EXPENSE (INCOME) | -1171 | -2842 | -4093 |

PROFIT BEFORE TAX | 51,899 | 60,165 | 66,005 |

TAX | 15570...

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