‘My God, it’s chaos’: Lush’s founder on why he is so downcast
The badge on the lapel of Lush’s co-founder, Mark Constantine, does the talking for him today as his beauty retail empire is buffeted by one crisis after another.
A potential pandemic is “closing half the bloody world”, he explains, as his lapel badge reads: “Fuck, fuck, fuckity fuck”.
“At the moment I have got no shops open in Hong Kong or Milan. Venice is shut,” the 67-year-old adds. “A couple of months ago half of bloody Spain was shut down [due to the Barcelona riots].” The fires in California and Australia provided another expletive, while the end of freedom of movement is the “fuckity bit”, he explains. “I keep a neurosis top 10 but I’ve got to the point where things that were number one or two a year ago are number nine.”
This week Lush stepped up to the plate on the coronavirus, opening its doors for passersby to walk in and wash their hands for free with its soap as government advice flagged the role of basic hygiene in keeping viruses at bay. “The simplest thing you can do to not get a virus is to regularly wash your hands, so we’re saying people can come in off the street and wash their hands for free.”
The Poole-based retailer, best-known for its fragrant bars of soap and bath bombs, has run diverse campaigns with subjects ranging from the targeting of activists by undercover policemen to preventing the extinction of hen harriers (a subject close to the heart of bird fanatic Constantine).
But these days UK retailers are becoming an endangered species, with store closures rife and established chains struggling to absorb cost increases as sales move online. Rivals such as Boots, he suggests, are shortchanging customers with tired stores after owners banked profits and failed to invest in store refurbishments.
“When I go into Boots I’m pissed off,” he says. “I go to the new concept shop in Covent Garden and I think, well yes, that looks like you invested a bit of money into Boots. I want all my Boots shops to look like that.”
Lush, which turns 25 this year, has 446 stores around the world and a turnover of £545m, although the business is twice that size once joint ventures and other overseas tie-ups are taken into account. In 2018 the company made an operating loss of £4m but remained in the black – making a pre-tax profit of £23.4m – thanks to its share of business partners’ profits. The company, which has more than 12,000 staff, will show a further decline in profits for the year to June 2019 when its accounts are published next month.
The sales disruption caused by the coronavirus outbreak has added to costs stemming from Brexit. Defaulting to World Trade Organization tariffs would cost it £2.6m a year, and Lush has set up a new German plant which it hopes will alleviate some of the business upheaval. The economics of the business have also been affected by the decision to pay UK staff the independently verified living wage, which costs £10m a year more than the legal minimum wage, at a time when its annual business rates bill has also gone up by £1m.
Constantine appears perplexed that his ethical approach to capitalism is not bearing fruit. “A perfect situation for me would be, make a profit, pay your tax, give plenty to charity, and make sure you’re paying a proper living wage,” he explains. “So I’m not really getting on very well with my perfect virtuous circle.”
Lush is the biggest private-sector employer in the Dorset seaside town where it is based. It has 14 manufacturing sites as well as several offices including a trendy set-up reserved for digital-focused staff where hot-deskers can work in a leafy central atrium or overlooking yachts bobbing in the harbour.
Constantine has been an ethical retail crusader for decades and was part of the early success of The Body Shop. He met the late Anita Roddick, founder of The Body Shop, when he was in his early 20s and became an important supplier to her business, concocting popular products such as peppermint foot cream and cocoa butter body lotion. A tenth of Lush is now owned by staff. The company’s founders – who include Constantine’s wife, Mo – promise to sell shares to the trust with the ambition that employees will eventually own 35%.
He is confident profits will recover but downhearted that the retailer’s finances are strained at a time when Lush’s business model is in tune with the zeitgeist. “I feel very much like I’ve been preparing for this moment all my life: where climate change becomes obvious, where excessive packaging is understood, where a sustainable supply is vital and regeneration is important,” he explains. “But my God, it’s chaos.”
With department stores in the frontline of the retail downturn, Constantine sees scope to commandeer empty stores and turn them into giant soap emporia where shoppers can stock up on shower gel and moisturiser before getting their hair done or having a facial. All 23 Beales outlets – including the prominent store in Poole – are closing after the department store chain went bust, adding to the growing number of empty stores around the country.
Lush has invested in a 1,390 sq metre (15,000 sq ft) store in Liverpool that the businessman hopes will impress landlords. “Perhaps they would like to pop round and have a look?” he says. “They would have to help me though because I’ve spent all me bleedin’ money doing the big stuff.”
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