The Body Shop International says it has conditionally agreed to buy Bellamy Retail Group, its joint venture partner in the United States, for £7.9 million sterling.
The retailer, which made its name by selling natural beauty products, made a joint deal with BRG in June 1998, which gave BRG day-to-day operational control of the company's US business and options to acquire up to 51 per cent of that business.
"The purchase of Bellamy Retail Group is a very positive development for the Body Shop. By retaining full ownership of our US business, we will gain the full benefit of a major market opportunity. This transaction also allows us to leverage Adrian Bellamy's retail expertise for the benefit of the entire group", said Body Shop chief executive Mr Patrick Gournay in a statement to the stock exchange.
The Body Shop, a 1980s success story that fell on hard times when other high street retailers muscled in on its niche market, said it would pay Mr Bellamy a further $1 million a year for consultancy work over the next two years.
It also said Mr Bellamy had entered into a seven-year agreement with Body Shop's founders, Mrs Anita and Mr Gordon Roddick, which gives them voting rights for 7.425 million of the new shares.
The deal is conditional on approval by shareholders at an extraordinary general meeting on August 9th.
The Body Shop's US operations made an operating profit of $5.1 million in the 53 weeks to March 3rd, 2001.
The Body Shop was approached by Omnilfe de Mexico last month about a possible takeover of the company, but the talks came to nothing.