Lush thrives on ethics
Since it was formed 17 years ago, pioneering beauty products Lush Cosmetics, eighth on the Solent 250 list, has been driven by innovation and its ethics. The Business Magazine‘s Sue Hughes spoke to UK finance director Andy Jones
Jones (pictured) knows that a peek in the Poole shop, next to a Lush Spa, offers a taste of all that is fundamental to the company‘s ongoing success – the sheer deliciousness of the products and the engaging customer service provided by the passionate people who work for the company. To see, touch, smell and experience a Lush store is a sensory assault, and just weeks after the Emotional Brilliance range of striking colour cosmetics launched, Jones says the latest venture has given the creative team in this brilliantly creative company ‘a real boost‘.
“Over the next three to five years the business focus remains centred on getting the message out to more people. Our customer base is responsive to what we‘re trying to do, but it‘s how we do it that sets us apart,“ says Jones. “We‘re a tiny part of a multi-million pound industry. We have to try to keep what we do interesting.“
Toothy Tabs are a revolutionary invention of solid toothpaste and have achieved more than £1 million in sales. They came about, as many products do, after core group customer research. Lush, co-founded by managing director Mark Constantine in 1995, is fortunate in having enjoyed superb social engagement with customers long before social media‘s reach was developed or widely embraced.
“We leverage feedback and go back to basics, such as getting rid of the toothpaste tube and caps, which are notoriously difficult to recycle. Once we get customers into our shops we know staff can sell,“ Jones continues. “We want to move into more countries, have a greater online presence and make the website more like the interactive shop experience. The website is something we can use to showcase the quality of our ingredients and our supplier partners.“
Lush, ‘anti-corporate‘ in many respects, has enjoyed its most successful year financially, with sales of more than £350 million and double-digit growth this year. In a recession, when spending is reined in, it is ideally placed to supply a ‘feel good factor‘ touch of luxury.
Still a family business, Mark and Mo Constantine‘s children are all involved: the eldest, Simon, works on the creative buying side and perfumery; Jack is following his parents footsteps into product invention; while Claire works in retail. The family is always looking for people to partner Lush in its journey – not a mere supply chain – despite the massive
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – OCTOBER 2012
are seasonal pressures on cash, but we manage peaks and troughs.“
quantities it buys. Throughout this expansion, Constantine has remained true to the team‘s original aims: “The whole point of Lush is that it should be fun for our customers and fun for us, while at the same time offering original products that work and give value for money.“
“We understand innovation and will take a step ahead a lot quicker than competitors,“ continues Jones.
Lush has acquired more office space in Poole as it has grown, with creatives based in a laboratory above the Poole store in the heart of the old town. Fragrance development led to the launch of a perfume range two years ago, with pure ingredients and simple shapes bringing something new to a market awash with celebrity-endorsed scents and packaging.
Now in 50 countries – with the latest openings in Lebanon and South Africa this month – it is considering South America and Poland, but never takes its eye off Europe. International expansion is ongoing because its competitors are mainly international. Mark Constantine was originally a supplier to The Body Shop, a high street retailer which has seen its popularity drop after the acquisition by L‘Oreal. Jones, however, praises The Body Shop as ‘fantastic for getting the ethical message out there‘.
As a successful retailer in the growth phase, Lush, knows how to make money: “We get value from a product, but we are true to the values that our products represent. Profits are ploughed back into development, taking advantage of opportunities as they arrive. We‘re nimble at mustering resources and have a long priority list. Our bank is flexible and provides good support because it understands us, and that we understand return on investment. There
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Incentives exist in the form of additional opportunities to share in the success of the organisation through profit share, but Lush does not have company cars, a pension scheme, nor a traditional HR department: “Personal and professional development is a daily matter. We all value feedback, and throughout the organisation we don‘t look for negatives.“
Vocal on the subject of tax, or more specifically, unfair taxation and high street business rates, Jones is personally focused on a state of transition for the UK team, as he settles into the relatively new UK FD role, which combines the previously separate retail and manufacturing finance operations.
“I‘m looking at the smooth development of the management team. Lush has grown dramatically and we are mindful of the stresses that growth can bring on the internal workings of the firm, which must evolve to continue to support the business effectively.“
Lastly, a key message for the Government from the retail perspective: “It‘s tough enough doing business on the high street as it is. Why have rate increases when the high street needs help? Compared to some of our other major markets, property costs are double the percentage of our sales in the UK.“
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