Soap star – Business Sense meets Lush co-founder Mark Constantine

The sweet smell of success

Mark Constantine, the self-proclaimed eccentric co-founder 
of one of the UK’s best-known high street brands, Lush, meets Business Sense over breakfast in central London.

He outlines the stages that have seen him turn a lifelong love of cosmetics into 
a thriving business with more than 700 stores worldwide.

What qualities make you suited to business?

For a start, I’m completely unemployable! I’m a bit volatile, a bit of a maverick, so I really had to have 
my own business. I don’t think there’s great scope 
for really innovative cosmetics in the world unless you create your own outlet. The same can be said 
for plenty of other industries, which is why new, innovative and niche firms will always have some chance against the established big boys.

How did Lush come about?

At 14 I became obsessed with cosmetics and make-up, which is quite unusual for a straight guy. I say that, but I don’t understand why it’s unusual, because if you like girls it’s good to know about these things. Anyway, I guess it was inevitable that I would end up working in the cosmetics industry.

In the 1970s, myself and some colleagues [including Mark’s wife, Mo Constantine] had a business called Constantine and Weir, that supplied The Body Shop with products. We sold that business and then set up 
a popular mail-order business, which did very well in sales but unfortunately not quite so good on profits. That company went bust, so I went back to the cosmetics business and decided to start Lush. We had a shop and a small factory unit, so it started with that and we managed to keep the payments up. Slowly we built things up again, and this time we had a much more profitable business model.

Where did the name come from?

I’ve always been very lucky in that the products my companies have produced have had ‘fans’, which is pretty weird for a cosmetics firm, but very welcome. When our mail-order business went down, we still had around 1,000 customers on our mailing list, so we got in touch with these people when we wanted to launch our new business. At that point we were just called Cosmetics House, so we asked our former customers to suggest a better name for the business. They wrote in with ideas – many of which are actually product names today – and one suggestion, by a lady called Elizabeth Bennett, was Lush Garden, which we shortened to Lush. Elizabeth won one of everything in our shop as a reward.

How did you expand the business?

We used to get around 1,000 enquiries a month from people who wanted to partner with us to open shops in their country, because they could see our innovation and wanted to be a part of it. We would sift through those enquiries and look for people that we liked. Nowadays, a lot of the people who set up the shops in the likes of Italy, Germany, Austria, et cetera have moved on – we bought them out and installed our own management teams, but they did a great job in breaking the back of those countries so that we now have an established business there.

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How much of your personality is in the business?

Product development is still a big part of my role, and I enjoy listening to customers and then working on the cosmetics with our staff and customers to get the right end product. I do have strong views on the products, but they probably reflect our customers more than they do me because we spend so much time speaking to customers and asking them what they want.

Do you have a management style?

I’m an excellent communicator, which is generally 
a good thing, although if you don’t want information passed on to other people, you shouldn’t tell me anything. I deal with problems by telling everyone what the problem is and then trying to work 
through solutions. I’m very much in favour of openness and honesty in business.

What has led to Lush’s success?

We are great innovators – our products are original and, strangely, they seem to be so original that others struggle to do the same thing. When customers go in our stores or look online, they have a big choice of products that are fairly unusual for the industry. 
In addition we have a slogan: ‘Celebrate the eccentric, because that’s what’s made us what we are’. I think our eccentricity goes down well in this country.

How can other innovative businesses aim to achieve the sort of success Lush has had?

It’s important to get great business advice early on, either externally or by bringing an experienced head into the firm. We have Andrew Gerrie, who has a real understanding of business and was able to help steer the expansion. The other thing that helps you grow in those early days is establishing good relationships with other businesses, where you can work together for your mutual benefit. But beware of working with the wrong type of business – it’s not good to end up on the wrong end of deals with some supermarket buyers where you can really get squeezed. You don’t have to sell your soul in business – if the deal’s not right, don’t do it! With the growth in online shopping, you can always look at selling direct to customers. If you go down that route, though, you will need a good PR person or agency.

When it comes to your product, you can’t just give customers what they ask for. You need to exceed their expectations. If you fulfil their needs and then go beyond that, they will keep giving you their money.

Finally, you have to accept that problems and hitches are part and parcel of being in business. The trick is to deal with any issues quickly and efficiently – if you allow things to get out of hand, it’s bad news.

How have you altered the way your business works as a result of the challenging economic climate?

Funnily enough, we were probably a lot more hard-nosed at the beginning of the business, because it was a lot harder then and we were trying to build. We’re now in that nice situation where the business 
is established and we’re looking to increase some employee salaries and improve things. That’s a lot easier to do once the basics of loans and mortgages are not such a worry. We are in a fortunate position – we make our own products, we stock them in our own shops and we teach our own staff how to sell them.

The other thing in our favour is that we operate in more than one market, which gives us great strength. Having shops in the States, in Japan, in Russia all helps because when one market goes down, quite often one of the others picks up. At the moment we are very strong in Southeast Asia and Russia, which makes up for weaker markets in other parts of the world.

Are there still profits to be made on the high street for SMEs?

It’s tough at the moment. The Government needs to look at business rates and landlords need to get more realistic over rental prices. Until then, it’s not an environment that helps foster small- and medium-sized enterprises. However, it’s not impossible, and 
I think that successful businesses will be the ones 
that have a small high-street presence that gives customers confidence, backed up by a strong online offering. You have to be very careful with any expansion and make sure you have a working, dynamic model – plus or minus 10 per cent is the difference between success and failure.

What’s the best piece of business advice you’ve 
ever received?

‘Dig where there are potatoes’. I can’t remember 
who said that to me, but I’ve always remembered it. So, when you find a successful thing to do, don’t start looking around for something else immediately. Stick with what works and really make the most of it.

What makes the Lush brand stand out?

The recognisable scent of our shops certainly helps. 
If you take the packaging off cosmetic products, the result is a strong smell, which I refer to as ‘the smell of the future’ because when people can’t afford to 
turn petrol into plastic packaging anymore, that will be the way everything is sold.

Why has Lush moved into spa treatments?

We started doing treatments at the very beginning, so really what we’ve done is return to that. By offering treatments, it allows us to develop new products for that service, so it’s something that is central to the business and the way I want to see Lush grow in the future. One of the nice things about it is that we get our staff in to have treatments so that they get to understand the products better. It’s a perk for them, but it helps us train our employees at the same time.

How important is innovation?

Going back to the subject of the environment – if we are facing a world with less and less oil, there are two choices: diminish everything you offer to a customer, or think about how you can do it without packaging and plastic by coming up with a better alternative. If you look at something like shower gel – let’s say that 60 per cent of the product’s price is the packaging and only 40 per cent is the contents. If the company can find 
a way to get rid of the packaging, they have 60 per cent more of your money to spend on ingredients, lower the retail price and increase their profits.

Not all innovation is good, though – one of the funny trends in recent years was the move from bars of soap to hand-pump liquid soaps. People spend 
a fortune on what is effectively packaging, and yet 
a bar of soap lasts far longer, is cheaper and is much more environmentally friendly. We’re now seeing 
a big return to bars of soap as people realise it’s 
a simpler and much more effective product.

How much do your ethics affect the business?

It’s an interesting question, because it would appear that many companies manage quite well without ethics, so economically I’m not sure how much ethics affect your bottom line. However, if you are an ethical person and believe in doing the right thing, I think ethics are very important and will often help you identify with customers. Overall, it’s up to customers to help change the practices of those companies that don’t have good ethics – consumer spending will always drive the decisions those firms make.

What’s the future for Lush?

More of the same, really. We would like to grow from just under 750 shops to more than 1,000 in the next 
18 months, and we think that’s possible. The most important thing is that I still get a great deal of pleasure from the work I do. That’s what drives me.

November 2011