Body Shop chief ran bankrupt retailer

The new boss at the Body Shop was the chief operating officer of one of Canada's biggest department store chains when it was forced into bankruptcy in 1997, it emerged yesterday.

The Independent
February 16, 2002

Body Shop chief ran bankrupt retailer
Stephen Foley

The new boss at the Body Shop was the chief operating officer of one of Canada's biggest department store chains when it was forced into bankruptcy in 1997, it emerged yesterday.

Peter Saunders, the head of Body Shop in the US, was promoted to group chief executive on Tuesday, and the company was yesterday required to tell shareholders that he had been involved in a corporate failure.

T Eaton, the 130-year-old general department store chain in Canada, filed for bankruptcy protection in 1997, owing 420m Canadian dollars (£184m). The company eventually emerged from bankruptcy, having laid off 1,000 of its 15,000 employees and been allowed to dip into its pension fund surplus. Mr. Saunders left the retailer shortly after.

At the time, Eaton's – best known for the Eaton Center in downtown Toronto – said it had suffered from cut-throat competition with discount stores such as Wal-Mart and Kmart. The group's sales declined by a quarter in the five years to 1997.

Mr. Saunders had been with Eaton's since 1972, working his way up to take over as chief operating officer in 1995.

Rules covering the appointment of new directors require them to disclose if they were board members at a company which filed for bankruptcy protection during, or shortly after, their tenure.

Mr. Saunders is being paid £500,000 a year in his new role as the chief executive of Body Shop. He has been with the group for more than three years and is credited with having turned round the performance of its US operations, returning the business to profitability.

A management shake up on Tuesday saw the departure of Patrick Gournay as chief executive, while Anita and Gordon Roddick, the joint chairmen and founders, moved into non-executive roles. Adrian Bellamy becomes chairman.

Mr. Roddick said: "We believe that now is the right time to hand over leadership of the company to Adrian and Peter, who have successfully transformed our US business."


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