Lush Franchise - Do They Really Franchise?

22/11/2018 18:00 | Start a business

Lush Franchise - Do They Really Franchise?

Over the years, Lush has managed to build one of the UK’s most popular and recognisable brands. Here, we take a look at whether Lush offers franchising opportunities and what other cosmetics franchise opportunities are available.

Lush franchise UK

Lush cosmetics like to do things differently. With their unique “no advertising” policy, emphasis on employees performing “random acts of kindness” by offering freebies, and distinctive vegetarian and vegan approach, they’re a one of a kind business that many investors would love to become involved with.

The company has built a large and loyal following that often engages with the business in ways that go beyond the traditional business-customer relationship. For instance, customers provide the business with a considerable amount of online content that’s often used to populate Lush’s social media profiles, blog, and website.

The strong bond between the business and customers has ensured that Lush has been able to minimise certain expenditures that often prove costly for a company of this type. This is most obviously expressed in Lush’s refusal to pay for traditional advertising exposure (e.g. television spots, print ads, or celebrity endorsements). Alongside user-generated content, they have also run some attention-grabbing in-store campaigns that are notable for their political subject matter.

The Lush target market

The UK cosmetics industry is worth approximately £4.6 billion and boasts an annual growth rate of around 4.5% . To post growth figures as impressive as this, particularly when many other types of retailer are struggling, demonstrates just how healthy the sector is. Cosmetics retailers total around 1,400 businesses and employ roughly 36,600 people. Its products are aimed mainly at women, though the male market is growing at a steady pace, too.

In regards to Lush’s key markets, the business makes a concerted effort to appeal to its target audience. This has been established as young women between the ages of 18 and 45, who generally live in densely populated areas and have a reasonable amount of disposable income. However, the company’s ethical viewpoints also ensure it appeals to anyone interested in environmental protection and contemporary social issues.

A brief history of Lush

The Lush story begins with two individuals, Mark Constantine and Elizabeth Weir, who set out to launch their own cosmetics business, having been inspired by the success of The Body Shop. The two acted as important suppliers for the business until the Body Shop decided it wanted to bring its product manufacturing in-house and paid £11 million for the Constantine and Weir’s recipes. This money allowed them to set up their own mail-order cosmetics business. Though the mail-order business was successful at times, it eventually ended up in administration.

However, from the ashes arose a new venture. Based out of a small shop in Poole, Constantine, Weir, and a number of associates began making and selling their own cosmetics and bath products, with a focus on natural ingredients. The business started to take off and, in 1995, after a naming competition, the company was christened “Lush.” Since then, it has emerged as one of the UK’s most recognisable brands and a major global export.

Is Lush a franchise?

Those hoping to open their own Lush franchise will be disappointed to discover that the business is not a franchise and has no plans to adopt a franchise model in the future. The business has always been a privately owned company and does not intend to alter the way in which it structures itself or facilitates expansion in the foreseeable future. This makes an investment in the business particularly tricky. While individuals are encouraged to inform Lush of any territories they believe to be ideally suited to a new store they will not be able to open, own, or operate that store themselves.

How much is a Lush franchise?

As Lush is not a franchise, there is no costing information available. However, we do know that the franchise network now encompasses more than 900 stores, of which approximately 500 can be found in the UK. The business also posted record pre-tax profits in 2017, with a turnover of £995 million and profits of £73.5 million. This is up from the previous year’s turnover of £729 million. The business has also made extensive investments in its retail portfolio.

Three alternative franchise opportunities

Though it may be disappointing to hear that Lush do not currently offer franchise opportunities, would-be business owners shouldn’t be put off. There are some alternatives to Lush, many of which could prove just as profitable. They include:

1. Guinot

Guinot market themselves as one of the UK’s leading cosmetics suppliers and manufacturers of many essential beauty products. With a focus on high-quality skincare products, the business also offers in-store beauty treatments and consultations. The franchisor has also developed an extensive franchise package that provides franchisees with all the training and guidance they need to launch their business. Costing approximately £87,000, of which 30-50% must be funded through personal assets, a Guinot franchise unit is within the financial reach of many entrepreneurs.

2. Stenders

The most promising franchise competitor to Lush may not yet have arrived in the UK marketplace. Stenders is a Latvian-based franchise that offers bath and body care cosmetics that appeal to a similar market as Lush. With a presence in China, Japan, Portugal, Russia, Ukraine, and Saudi Arabia, they’re currently looking for the right individual to operate a master franchise in the UK. Adopting a similar approach to Lush, the company emphasise their ethical values and have embraced a natural, garden-style aesthetic that is likely to prove popular amongst the UK consumers. Their strong franchising structure also bodes well for expansion into the UK market.

3. Start your own cosmetics franchise

Finally, if you can’t find an appealing alternative to Lush, why don’t you go out and build it? Starting your own franchised business is a long and challenging process but is typically remarkably rewarding. You’ll need to begin by establishing your own cosmetics company with a strong brand and a business model that can be replicated in various locations, but if you’ve got the vision, it’s an achievable dream.

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