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Lush ‘Merely Scratching The Surface’ Of Multi-Billion Dollar Cosmetics Market

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Up to 81% of consumers are more likely to purchase from businesses that are active in philanthropic efforts year-round, according to research from Aflac. This data point rings especially true for Lush, a provider of organic and vegetarian handmade cosmetics. The brand and retailer has seen exceptional growth over the past three years, and shows no signs of slowing down.

During an intimate event at Bouley Botanical in New York City, Lush North America President & CEO Mark Wolverton shared new details regarding the brand’s success over the past year, and zeroed in on its plans for growth and innovation in 2016. Chief Operating Officer Andy McNevin and Brandi Halls, who is the Director of Brand Communications, joined Wolverton for the presentation.

Consumers have responded strongly to Lush’s brand ethics as well as its whimsical products, leading to a significant boost in sales. By the end of 2015, Lush is expected to generate $870 million in global brand sales, and $1 billion by the end of 2016. This is a significant increase from 2014, when the brand generated $720 million in sales. Online sales also have seen an exceptional boost. In 2014, total e-Commerce sales reached an all-time high of $65 million. By the end of 2015, that number is expected to swell to $80 million.

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“Our sales have more than doubled over the past five years,” McNevin said. “To put these numbers into context, we believe the overall cosmetics market is a $225 billion industry worldwide. So at $1 billion, we’re just scratching the surface and have so much more room to grow.”

More Stores, More Employees

As a result of its rapid omnichannel growth and increased customer demand, Lush has expanded its store footprint and global employee count. The total number of global employees, including store associates, corporate staff and manufacturing staff, has reached 15,000. By the end of next year, the brand will have up to 956 stores and seven factories worldwide, according to McNevin. “Our employee count will nearly double over the next few months as we head into the holiday season.
 
While it has been increasing its store network on a global scale, Lush has seen the most exceptional growth in the U.S. Nationwide, sales are poised to increase from $169 million in 2014 to $402 million in 2016. Looking at e-Commerce specifically, sales are expected to increase from $18 million to $44 million over the same period of time.

“We’re currently at 231 stores in the U.S., but that’s growing every day,” Wolverton said. “We also have the highest amount of same-store sales in the U.S. compared to any other country.” Average store sales in North America reached $808,000 in 2012, but by the end of this year, average store sales will reach approximately $1.3 million.

Lush also has acquired a strong social following in the U.S. The brand has more than 916,000 Facebook “likes,” 1.6 million Instagram followers and nearly 250,000 Twitter followers, according to Wolverton. “We’re very excited about the two-way communication we’re having with customers and the movement we’re seeing on social.”

Embodying Strong Brand Ethics

Since its inception more than 20 years ago, Lush has maintained its business principles of ensuring ethical buying, implementing complete product development transparency and fighting animal testing.

“We do a tremendous amount of work to lobby against animal testing in cosmetics,” Halls said, “and we take a really strong stance toward ethical buying. We want to give back to communities and make sure we have a minimal impact on the environment when we develop our products.”

The brand also develops new products to raise money for charitable causes.

“We like to use our shops and different platforms to campaign, and use our voice for a good cause,” Halls noted. “We find issues that we believe in, protest and use our shops as campaign centers.”

For example, Lush ran a #savesharks campaign from July 5-19, 2015 to help raise awareness around shark finning. The brand developed a limited-edition soap shaped like a shark fin and was able to raise $210,000 for the cause.

Lush also has focused extensively on testing new and innovative products. For fiscal 2016, Lush will create up to 48 million product units, including new cosmetics, soaps and perfumes. The Oxford UK store, which boasts three levels, helps Lush implement this fast pace of innovation. Team members are constantly developing new products in the store, and testing them with interested shoppers.

“Our Oxford Street store is about 10 times the size of a normal store,” McNevin said. “It’s on the highest-traffic street in all of Europe, so it’s a really exciting opportunity and has the potential to be a $15 million to $20 million shop.”

 

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