ANITA Roddick is to take a back seat in the Body Shop cosmetic retail chain, which she founded 22 years ago with a single shop in Brighton.

She is to step down as chief executive to become joint chair with her husband Gordon in July. French executive Patrick Gournay is to take over her post on July 14.

Body Shop has become an international business with 1600 stores, mostly franchised, across 50 countries.

In the early days its ethical stance of using only natural products and its opposition to the testing of cosmetics on animals struck a chord with young shoppers.

In recent years the formula faltered as other retailers muscled into the market for natural products, increasing competitive pressure.

It has never worked in certain markets, notably in the fiercely competitive shopping malls in the US, and in the sophisticated French cosmetics market. They have never been profitable for Body Shop and there have been lawsuits mounted against the company by franchisees.

The group has also faced allegations that its products were not as environmentally friendly as they were sometimes proclaimed to be.

Asia-Pacific was an unexploited region until recently and the group had been hoping to do well in the developing consumer markets there. However, the economic downturn there has killed this dream. Now the group is facing declining like-for-like sales and pressure on margins.

Gordon Roddick said the decision by his wife to step down had been a voluntary move.

''Reality dictates that . . . at this size of business we really are not good at line management.''

Roddick acknowledged that Body Shop's shareholders had been looking for ''positive and demonstrable'' change at the group, whose shares hit a three-year low of 108p in March. They stood 1p higher yesterday at 120.5p.

Roddick explained the company needed to become more flexible to bring its creative ideas to the marketplace more speedily.

He added that his wife would continue to act as the face of the business to the outside world.

''Anita has tremendous creative talents. Patrick will use her creative talents to help develop the business.

''She has tremendous networking ability, like giving interviews and talks. She will continue to be out there networking and helping,'' he explained.

He said it had been very important that the new chief executive shared the company's environmental and social concerns, and that in Gournay it had found someone with interests parallel

to its own.

Gournay is executive vice-president of the US division of French yoghurt producer Groupe Danone.

Body Shop announced that it intended to transfer its loss-making US business to a joint venture under the control of Adrian

Bellamy, who is a non-executive director of the group and has 30 years of retailing experience.

He is also a non-executive director of Gucci, the luxury goods company, the Gap chain of clothes stores and duty-free shops group DFS.

Bellamy is paying $1m for an option to buy up to 51% of the business at net asset value between 2000 and 2002, subject to its performance improving. It made losses of #1.7m in the year to February and hopes to break even this year.

For the group as a whole, profits in the year were flat at #38m excluding exceptionals. Like-for-like sales were also unchanged, although turnover rose 8% to #293m owing to new store openings. At the year-end there were 1594 outlets, a net increase of 103. Margins were up but only because more franchisees were bought out.

In the UK, comparable sales were 2% ahead but profits dipped by 18% to #11.2m because of higher marketing spending and costs associated with the mail- order venture.

Profits in Europe were flat and those in Asia slightly ahead on the back of new store openings.

In the first eight weeks of the current year, comparable sales in Asia slumped 14% and only Europe and the Americas excluding the US were ahead. At the year-end the group had cash of #29.6m, down from #47.1m.