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10/20/92

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Body Shop founder sells principles with profits

STANFORD -- Despite the multimillion-dollar financial showing of the English beauty firm the Body Shop, the company would rather be known for its unconventional and successful mix of business with social responsibility, its founder and managing director said.

"The success of a business is always measured in terms of money," Anita Roddick said at the von Gugelberg Lecture at the Graduate School of Business Friday, Oct. 16. "It is always about quantity. What about the quality of joy . . . the bond of friendship that is formed in doing business?"

Roddick's lecture on "Profits with Principles" was the fourth in an annual series that brings speakers on environmental issues to the business school. The series is funded by classmates of the late Conradin von Gugelberg, MBA '87.

Roddick can measure her success both ways. Her company's lack of a traditional advertising strategy in promoting beauty products is balanced by the media mileage that the Body Shop gets from its worldwide campaign on such social and environmental issues as human rights and the depletion of rain forests.

The Body Shop's use of environmentally friendly materials for its products, as well as campaigns for social responsibility, have attracted, rather than scared off, investors. Last year its net income was $29.51 million, a 35 percent increase over the previous year.

Roddick, 50, told the standing-room-only crowd at Bishop Auditorium that she will continue seeking ways to help people in developing countries find jobs by organizing community projects to make beauty products from natural resources. That mission has taken the British retailer to Nepal, where a community makes handmade paper using banana and rice fiber; to Mexico, where maguey plant is used to make body scrub mitts; and to Brazil, where nut oil is used to make hair products. In this country, she has found Native Americans who have agreed to raise blue corn for a new line of skin products.

Roddick stressed that her company pays her suppliers "First World prices," adding that 20 percent of the profits made from the sale of the products goes to services in the producing community such as mass inoculation, cataract operations and food.

"I believe that business can fly the flag of social change," Roddick said.

Established in England in 1976, the Body Shop has caught the attention of the profit-oriented international business community with its unorthodox strategy. Describing the beauty business as an industry "run by men," Roddick said she claims only that the Body Shop's products "cleanse, polish and protect the skin and hair. We make no dubious promises about rejuvenation and promote health rather than beauty."

The company stresses the use of natural products and campaigns against animal testing. It also uses its shops as a forum for discussion and education about social and environmental issues. These include ozone depletion, the burning of rain forests, civil rights and human rights.

This year, the social campaign of the Body Shop has reached the United States. "Don't say you care if you don't care enough to vote" is the slogan for the company's yearlong campaign to drum up voter registration in the United States for the November elections.

Roddick told the crowd that, unlike economist Milton Friedman's teachings, which she described as "giving business back to the businessmen," her company has always believed in people or employee empowerment.

Roddick's 16-year-old, billion-dollar company has the ideals of a typical 16-year-old, she said. Roddick herself still approaches her business and social campaigns with the enthusiasm she had when, to start the Body Shop, she borrowed $6,500 from a bank while wearing jeans and a Bob Dylan T-shirt and carrying two kids in tow.

"Everybody - the press especially - has always asked us, 'Why don't you grow up?' I will continue to have the passion to care about issues. I will never allow this passion to leave my workplace," Roddick said.

-jz-

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