Cosmetics retailer Body Shop has said the launch of its online shopping service would be delayed while it restructured its internet operation.

The Littlehampton-based company is to pull the plug on web development venture Body Shop Digital and carry out the work in-house instead.

That will push back an e-commerce launch in the US from April until the autumn, with a knock-on effect in the UK, where no start date has yet been set.

Body Shop Digital was created eight months ago as a joint venture with Seattle-based Softbank Technology Ventures. It was charged with developing a global internet presence and e-commerce capability for the company.

But Body Shop International said opportunities had since arisen to integrate internet operations more closely with Body Shop's existing retail and mail order businesses.

A settlement, agreed following the termination of the venture, will see Body Shop International pay about £4 million for some of Body Shop Digital's assets.

A handful of staff will be retained to work on the new operation.

The company said: "The US market continues to be the first priority for the launch of an e-commerce capability, which is now scheduled for the second half of 2001.

"Development will be centred within the USA, building on the work carried out over the last few months by the Body Shop Digital."

It added the realignment of the internet operation would create synergies through a "multi-channel retail strategy".

Body Shop was founded in Brighton 24 years ago by entrepreneur Anita Roddick, who headed the company until earlier this year when she quit in order to concentrate on humanitarian and environmental issues.