Ethical cosmetics chain Body Shop has seen its profits slide in what it called a "disappointing year" in 2001.

Pre-tax profits were down 9% to �11.6m ($16.9m), and the company said it still had "operational issues" to resolve.

Body Shop founder Anita Roddick, who became one of the UK's most high-profile businesswomen as the store chain rose to prominence in the 1980s, stepped down in February after talks with potential buyers for the company ended.

Sales at stores open at least a year fell 2% during the first seven weeks of 2002, the store said as it published its 2001 results on Thursday.

Strong competition

"The 2002 financial results were disappointing, not so much in the aggregate but more in the missed opportunity," executive chairman Adrian Bellamy said in a statement.

"The single most important priority is to improve comparable store sales performance across the business through the introduction of new product ... to drive higher conversion of customer traffic into sales."

The chain, which built its reputation on selling products not tested on animals and exotic herbal toiletries, has seen its market challenged in recent years as mainstream competitors adopted similar tactics.

Last year, talks with Mexican nutritional supplements specialist Grupo Omnilife, who were reported to be putting together a �300m offer for Body Shop, came to nothing.

The Body Shop owns about 500 stores in 50 countries, and also runs a network of international franchised outlets.