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LUSH EXPANDS ECO-FRIENDLY BEAUTY EMPIRE

By Neil Janowitz

Walking into a Lush store is not unlike entering a log cabin or some similarly rustic place, save for the overpowering scent of mango and mint and other items not typically associated with frontier housing. Of course, all of this is assuming you can walk into a Lush store. “Last Christmas season was crazy, said the manager of the Lush store in New York City’s Herald Square, who asked to be identified only as Wendy. “Our store isn’t that big, so our checkout line wrapped around the [kiosk in the center of the store] multiple times. People were shouting to one another across the store and passing things from stranger to stranger.”

Those were the kinds of crowds — overflowing out the front door and down the street — that originally grabbed the attention of Mark Wolverton, current president and CEO of Lush North America, when he was in London in 1995, shortly after Lush’s original U.K. locations had launched. Within a year Wolverton, who at the time was running his family’s Canadian brokerage business, Wolverton Securities, and his wife, Karen, had authored a licensing agreement and brought the Lush enterprise to Canada as Lush North America. From there, it spread to the United States. So did the lines.

Lush’s marketing strategy embraces the responsible treatment of the environment. Wolverton equates the purchase of a Lush product to that of buying milk — everything is as natural as possible. All the items are made fresh on a store-demand basis, and 65 percent of the items don’t have a single preservative.

Adding to the appeal are the unusual textures and aesthetics of the Lush catalog. “Our stores are very touchy-feely,” observed Wolverton. “We invite shoppers to actively test and participate with the product, which is so innovative that it draws people in.” Indeed, the aged-wood bins and shelves in the Herald Square shop were overflowing with vibrantly colored chunks of nearly any texture imaginable — one moment Wendy is showing off a shampoo bar that looks like a solid mass of blueberry sprinkles; the next, she’s holding a speckled pink bath bomb that looks like the offspring of a bar of soap and a potpourri dish.

To keep the selection appealing, Lush is ruthless about updating its offerings. The company takes the lowest-selling one-third of its total line each year and eliminates it, then introduces completely new replacements. It also does everything in-house, including product conception, design, marketing, and even the manufacture of in-store signage and furniture. That arrangement affords it the ability to quickly move new product to the market. “We’re constantly changing the experience for the customer,” Wolverton said. “Other companies make five years’ worth of product and have to stick with it. Not having inventory means we can react.”

But things did not go smoothly for Lush when it first went to the U.S. “Landlords weren’t receptive,” recalled Wolverton. “They said that what was working in our Canadian stores wouldn’t work in the States.” But Lush used a few strong boutique locations to establish a foothold, and landlords couldn’t ignore the never-ending lines.

The company now has nearly 500 stores in 37 countries, with 27 different Web platforms and seven manufacturing plants. Sixty of those stores are in North America, and Wolverton says Lush North America has plans to roll out 52 new company-owned shops this year and 35 a year thereafter, with roughly a quarter located in Canada. Although many of the units to date have been freestanding boutiques, Wolverton says the stores in malls have been “phenomenally successful,” compelling them to consider almost 170 new mall locations.

Meanwhile Lush is developing deals to place shops in airports — following successful test runs in Toronto and Orlando — and in larger department stores. Sales have been brisk at the small store-in-store units the company placed in a handful of Marshall Field’s, (since renamed Macy’s) stores; now, Wolverton says they’re closing in on a deal to put such units on the cosmetic floors of Macy’s across the country.

Store sizes range dramatically. Store-in-store units are about 400 square feet, while main stores are anywhere from 500 square feet to 1,200 square feet. Wolverton says that top-selling stores bring in about $2,000 a square foot. That has translated into a roughly 35 percent growth rate per year in store sales and 28 percent annual growth on the Web.

Andrea Praet, a trend consultant with Paris-based Promostyl Americas, an international trend forecasting firm, says she doesn’t see that growth slowing any time soon. “If anything,” she said, “they’ll continue to become even more popular. Being green isn’t a trend,” Praet noted. “It’s a movement.” She says the lack of packaging on Lush products is a huge selling point for environmentalists, as are the stress on natural oils and a stance against testing on animals. “The product definitely matters,” she said about the current state of the cosmetics industry, “but people are becoming very interested in the ethics of the companies.”

Lush has myriad plans to further distance itself from the pack. The international company is testing a series of Lush-branded spas in the U.K., and Wolverton says if they’re successfully he’ll surely bring them to North America. After that comes Be Never Too Busy To Be Beautiful, or simply, ‘B,’ an entirely new brand of color cosmetics and fragrances meant to complement Lush. One hundred “B” stores are slated to roll out over the next five years.