Lush Cosmetics is a manufacturer of ethically sourced, environmentally friendly cosmetics. Based in Poole, Dorset, the company has manufacturing facilities (or ‘kitchens’ as the company calls them) in Canada, Germany and Croatia.

The company’s founders, Mark Constantine and Liz Weir, have worked together for almost 40 years. Mark is a trichologist, Liz is a beauty therapist; they met in a salon in Poole in the early 1980s and began producing their own range of products under the name Constantine and Weir. Initially, they sold the products to the Body Shop, another cosmetics firm famous for its ethical stance, and eventually sold their formulae to the Body Shop for a reputed £11 million. The sale agreement had a no-competition clause which forbade them from opening another retail shop for five years, so they started a mail-order business instead. This business went bankrupt – taking most of their money with it. 

Undaunted, Mark and Liz started up again, in rooms above Poole Market; inspired by the fresh fruit and vegetables on offer below them, they began hand-making products using vegetable essences. They ran a competition among their customers for a new brand name, and this resulted in the name Lush, which denotes freshness and verdant growth.

All Lush products are vegan – no animal products are used at all, and the company does not deal with any suppliers that do not conform to the same high ethical standard. Products are tested on human volunteers rather than animals, and the company does not use palm oil (which is often the culprit in the destruction of wildlife habitats). Lush also supports many charitable initiatives, and has a regular ‘Charity Pot’ feature in which a specific hand lotion is sold for charity. The entire sale price of the Charity Pot is contributed, usually to small charities working for environmental or animal welfare causes. So far Lush has contributed over £10 million via this initiative........

Case study questions 

1. Why would the company effectively give away revenue through the Charity Pot scheme? 

2. Why are the brand names for the various products so important? 

3. How are customer needs addressed by the company's ethical stance? 

4. Why encourage staff to use the products themselves? 

5. What is the benefit of remaining a private company?