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Lush co-founder Mark Constantine

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It’s a happy time at the home of Lush co-founders Mark and Margaret Constantine, with a big year ahead both on a personal and commercial level.

Not only did the Queen’s New Year honours list place an OBE next to the names of the married couple, who are the brains behind the globally successful cosmetics retailer, but their children are both getting married in the spring and business appears to be booming.

Mr Constantine, who has been in the cosmetics industry since the age of 22, working for businesses that supplied products for companies like Body Shop, modestly tells Retail Gazette that his royal honour is thanks largely to all the good work achieved by his staff, who operate in the company’s 717 stores across 43 countries.

“It was very nice it was my wife and I who got an OBE – normally it would be one or the other so that was very complimentary,” he states.

“Although we’re getting the award, we are taking it on behalf of the business, everyone who works for us and the customers.”

With two family weddings on the horizon, which take place within ten days of the pair picking up their royal accolades, as well as the spring marriage of Prince William and Kate Middleton, there is much to celebrate.

“You could call it three weddings and an investiture!” the retail boss jokes, hinting at a potential but unlikely sounding Hugh Grant film of the future.

Despite the sunshine glow surrounding Lush, where Christmas sales were 6.8 per cent up year-on-year, storm clouds are looming over the British retail industry after a tough festive period buried many companies’ profits in the snow.

Constantine suggests that the kind of logistics problems seen this year are caused by taking manufacturing away from the UK - a move that is often exacerbated at Christmas, when weather conditions regularly mean retailers need to change strategy.

“Retailers can better prepare for inclement weather conditions by manufacturing in Britain,” he says.

“We do this and we were still estimating and manufacturing up to six days before Christmas, enabling us to be flexible and supply what customers wanted.

“A lot of our business comes in three days before Christmas - we can do a week’s trade in a day but not if you there is not enough stock or the wrong products.”

The plight of the high street is not just down to the supply chain though; it is the cost of property that many retailers find crippling.

HMV Group, the owners of DVD and music retailer HMV and bookseller Waterstone’s, is currently facing a number of problems in a changing marketplace, but it is essentially a prime example of how high operating costs are squeezing the life out of traditional retail.

“If you can’t sell a book or a CD in Britain and make any money, this suggests that rents and rates are too high. We know there is a market for that product,” Constantine remarks.

“HMV struggling is an intriguing indicator of the current state of the British high street.

“It is not just the competition from the supermarkets that is causing the problem because they only take a percentage of the market – probably not even 15 per cent.

“It seems to be that we are due some kind of crisis in the UK property market. It feels the same before the collapse in property prices of a few years ago.”

But what about the future for Lush? Constantine claims that the company invents more cosmetic products than any of its competitors in Britain, and suggests that by being so innovative it sits “quite neatly between fashion and cosmetics” in the world of retail.

“That is what customers like and we will be doing a lot more of this in the year ahead,” he notes.

Online sales are also strong and Constantine appears to be on top of the demands of today’s multichannel retail world, which requires all platforms of a business to be interlinked and of great relevance to a shopper.

He has 2,000 Facebook followers, who he talks to regularly, and the business has 135,000 fans. These followers use the social networking site to offer constructive feedback, both bad and good.

“Our customers are the same customer no matter where they come to us from and we provide information for them any way we can.”

Lush has not focused on growing its network in the UK for some years now, with Japan becoming the company’s key market, but there are plans to expand its operation in Britain in 2011.

“We are increasing shop numbers,” explains Constantine. “We have 94 stores in the UK and we will certainly go over 100 stores over the course of the next year, potentially building up in key locations like central London and Birmingham.”

Future plans may be held back if the retail boss’s market predictions ring true, though, and this week’s GDP figures have sparked fears of a double dip recession in the UK, which could also put the brakes on any portfolio expansion.

“A lot of our UK growth plans depend on the situation with landlords and property,” he said.

“Rents and rates in this country are too high. At some stage there needs to be a collapse of the rents unless there is going to be nothing but jeans for sale on every high street.”

Local authorities and commercial property decision makers would do well to listen to a man, who amid the industry doom and gloom, appears to have his own house very much in order.

Published on Wednesday 26 January by Editorial Assistant

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