Most of the jobs will go at the company's head office at Littlehampton in West Sussex - the town where Anita Roddick founded the business.

Body Shop's earnings collapsed by 90% to £3m in the year to February.

The job cuts are part of a restructuring unveiled earlier this year which is designed to cut costs and improve the group's ailing performance.

Cosmetic surgery

The company also revealed that it has identified a potential purchaser of its two manufacturing plants in Littlehampton. Body Shop hopes to sell the plants by the summer.

Underlying profits for the year to February 1999 fell to £24.5m from £38m. However Body Shop has had to spend another £21m restructuring the business.

Chief executive Patrick Gournay, who was appointed last year, has been forced to take radical action after a fall in business in the UK and a disappointing performance at the group's troubled US operation.

Christmas pudding

Body Shop admitted that it had got it wrong over the vital Christmas trading period saying its offer wasn't strong enough.

In January, Mr Gournay unveiled moves to take Body Shop out of manufacturing and shake up the group's ageing management structure. The jobs cuts are aimed at saving the group £8m over the next few years.

Body Shop has managed to maintain its final dividend at 3.8p, lifting its total pay-out for the twelve month to 5.7p from 5.6p a year earlier.

The company has also been hit by competition from other retailers, including Boots, who have introduced their own lines of environmentally friendly cosmetics.

Mr Gournay warned that there were no quick solutions to Body Shop's problems.