1. Best in France Case Study
L U S H Cosmetics
…an English company
in France
Best in France Case Study
Research by:
Regina Cordova
Maria Isabel Le Meur
Giusep Derleth
Best In France: LUSH Cosmetics

2. Best In France: LUSH Cosmetics
Presentation Outline
Company overview
History and location
The LUSH Business
LUSH Positioning
Presentation of Lush France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

3. LUSH History and Location
1978 : Supplier of The Body Shop
1994 : Creation of Lush in Poole (UK)
2005 : Still a small team but increasing sales : 120 M pounds
A worldwide company
410 shops in more than 40 countries :
UK : 83 shops
Japan : 80 shops
Canada :
4 factories:
UK, Japan, Italy, Canada
HISTORY
1978, it sold its first product to the Body Shop and in 1988, set up Cosmetics to Go, in Poole, Dorset. The company was a successful, catalogue-based mail order cosmetics company, before it experienced some problems due to expanding too quickly, and had to sell what was left of the company. In 1994, Lush started making cosmetics again and opened its first shop in Poole. Mark Constantine, trichologist and chairman, set up Lush in 1995 with his team of cofounders. Today, the company has over 190 shops around the world and operates mail order businesses from the UK, Canada, Australia, Italy, and Japan.
WORLDWIDE COMPANY:
It operates more than 190 shops, including 45 fully owned ones in the UK. Lush has mail order businesses in the UK, Canada, Australia, Italy and Japan and exports its products to more than 29 countries in Europe, North America, South America, Asia and Australia. The company is headquartered in Poole, UK.
LUSH company Overview © Datamonitor
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

4. Best In France: LUSH Cosmetics
The LUSH Business
Strong Values
Handmade and fresh ingredients
No test on animals
No or simple packaging
Products: A complete range of cosmetics
More than 600 different products
Skincare, Hair care, Bath products …
Customer relationship
Quality customer relations / Advice / Customization
NEED: Bring a product to present it
PRODUCTION:
- Lush makes its products out of fresh fruit and vegetables, plants, herbs, essential oils and minimal safe synthetics.
- The company makes all of its fresh products by hand, prints its own labels, and designs and produces its own ranges. Cheap packaging.
- Lush’s ballistics and bars are individually hand molded, the soaps are hand poured into moulds and hand cut.
VARIETY:
Some of its innovative products include Bath Ballistics, solid bubble bars, shampoo bars, frozen shower gels and massage bars.
LUSH company Overview © Datamonitor
Services : give the example of Christmas presents
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

5. LUSH Positionning HANDMADE Cosmetics NATURAL Cosmetics RETAIL LUXURY
Ethical
Values
Sabby’s
Lush
Essentials
HANDMADE
Cosmetics
Yves Rocher
L’Occitane
Fresh Line
NATURAL
Cosmetics
Bodyshop
Garnier
NEED: Matrix of the cosmetics market
I have some info, I ll do it but for next week!
Dior
Chanel
RETAIL
LUXURY
L’Oréal
Paris
Guerlain
Vichy
Givenchy
Customer relationship quality
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

6. Presentation Overview
Company Overview
Lush In France
Why France ?
Paris history and performance
Difficulties Faced
Adaptations Implemented
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

7. Why France ? A strategic market
France reputation: « the spiritual home of cosmetics »
Paris = second worldwide cosmetics market
Constant new products: 300 launches yearly French Cosmetics Market
No direct competitor in France
A great opportunity for Lush
2005 skin care sales in France: €3.3 billion
2010 forecast: €4.2 billion
Retail Sales of Skin Care by Subsector*
FRENCH COSMETICS MARKET:
- Sales of skin care reached €3.3 billion in 2005, registering current value growth of 8% on the previous year. This good performance was similar to the one achieved in 2004.
- Retail Sales of Skin Care by Subsector* (tables on Slide 10).
NO DIRECT COMPETITORS IN FRANCE
There are a lot of companies that use natural ingredients an against tests on animals but none produce their products by hand in France.
NEW PRODUCT DEVELOPMENTS
- Every year, the French skin care market is swamped by some 300 launches, according to trade press. Consumers tend to be loyal to brands and are willing to try any extensions that might be added, as long as they offer added benefits for their specific needs. -
Global Market Information Database for Groupe HEC: Skin care – France (7 August 2006).
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

8. France Cosmetic Market
Retail Sales and forecast of Skin Care by Subsector: Value
EUR million
2003
2004
2005
2006
2007
2008
Facial care 
2,118.5
2,277.0
2,427.9
2,520.7
2,618.4
2,735.2
Body care 
576.8
660.1
740.2
810.9
887.4
968.9
Hand care 
87.5
93.7
98.3
100.8
103.4
106.2
Skin care 
2,782.8
3,030.8
3,266.4
3,432.5
3,609.2
3,810.3
Source: Trade associations (FIP, PLMA), trade press (Cosmétique Magazine, FaireSavoirFaire, LSA, Linéaires, Points de Vente), company research, store checks, trade interviews, Euromonitor International estimates
Cosmetics (US $ mln): France 2001 – 2011
Year France % of Region % of Globe
% %
% %
% %
% %
% %
% %
Source: Philip M. Parker, INSEAD, copyright 2005, moment when
- Consistent increase in Sales
- Strong market forecast
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

9. Why France ? The « natural » trend
Booming natural cosmetics market in France
40% increase from 2004 to 2005 (Organic Monitor Study)
« The French market for natural cosmetics is the fastest growing in Europe »
Increasing awareness of the dangers of cosmetics
March 2005, Television documentary : possible dangers of substances used in cosmetics
Best seller in France : « La vérité sur les cosmétiques » from Rita Stiens
A comer market
23% of adults would pay more for environmentally-friendly products and never buy toiletries and cosmetics tested on animals.
NEED: Less wording on this slide
NATURAL GLOBAL TREND
- Natural senses: In opposition to the trend for more sophisticated products that soothe or exfoliate, in 2005 manufacturers also aimed to satisfy consumer demand for simplicity and “naturalness”, in terms of packaging, fragrances and ingredients.
Global Market Information Database for Groupe HEC: Skin care – France (7 August 2006).
- Nonetheless, the Organic Monitor study says that the French market for natural cosmetics is "booming" having increased 40 percent between 2004 and 2005.
- In particular, the study says that the surge in demand is attributable to media attention given to harmful chemicals in mainstream cosmetics.
- After a March 2005 documentary on the subject retailers reported a surge in business.
- As in the UK, market share is low. In France naturals have 2.0 percent of the market. Skin care sales are highest.
Product focus--Sales of natural cosmetics increase. Database: Business Source Complete
- A specific context in France = oppotunity for Lush
« Demand for natural cosmetics has soared since March 2005 when a television documentary highlighted the possible dangers of substances like parabens in cosmetics & toiletries »
“23% of adults would be prepared to pay more for environmentally-friendly products and would never buy toiletries and cosmetics that have been tested on animals.”
« The French market for natural cosmetics is the fastest growing in Europe »
Research and markets Fragrances and Cosmetics – France, Mintel, July 2005, Pages: 93,
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

10. Best In France: LUSH Cosmetics
French Stores
History of Lush France
Creation in 2004
Only 2 shops :
Paris (65th shop worldwide) = 6 800K €
Lille = 450K €
Lack of a specific company strategy
No plan for the future
Little knowledge about the french market
No target clients, no marketing
NEED: Store Pictures
HISTORY :
The Struggle to find a location
NO SPECIFIC COMPANY STRATEGY
- Perhaps one of the benefits to why LUSH has succeeded in France so far. Because this grants them a level of flexibility necessary to accept the higher costs.
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

11. Best In France: LUSH Cosmetics
Great Performance
Simple Strategy Implemented
Educating the market
Free samples, word of mouth marketing, customers resturned
Established strong customer base
Strong Revenues (Paris = 6 800K euros)
Customer satisfaction
Moisturizing Cream Buvard (Cream day/night)
“I (…) realized its effectiveness and I do not drop it any more, I'm sure I will buy it again!!”
Raz-de-marée
“I like this rubbing-out very much because I really think it is efficient. (…) a real effectiveness on my skin (…)”
French forum : « Lush addicts blog »
Been a while and a
Research and markets Fragrances and Cosmetics – France, Mintel, July 2005, Pages: 93
SIMPLE STRATEGY IMPLEMENTED:
- LUSH has no « targeted customer »
- LUSH Customer base = 1. strong local customer base tourist
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

12. Difficulties faced & relative costs
Finding the right location
Paris Store: 1.5 years
Lille Store: “the right price at the right time”
Location search costs
Delay costs
Customers’ specificities
Paris Market: « exigent customers »
Customers are well educated
Training costs
Legal constraints
Key money
Seasonal employees
Hiring process
Franchise
Legal fees for hiring seasonnal employees
Employee releasement costs
Franchises legal fees
Franchises delayed process opportunity costs
Cutural differences
Finding the right lawyer
Search for a new lawyer cost
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

13. Adaptations implemented
Few adaptations has been made :
No specific strategy has been implemented
Stores and Internet
2 stores and a french website
The products are very similar to the english ones:
Same products for all stores
Few adaptations on names and packaging
FEW ADAPTATIONS
- Products: some products are best sellers everywhere, same quality.
When the store first opened
- Product Names : example of Le miel et les abeilles
- Strategy Implementations: The LUSH staff was faced with a lots of well educated consumers asking questions.
NEED: DID THEY ADAPT IN ANY WAY TO ADDRESS THIS PROBLEM? I DID NOT HAVE ANYTHING ON MY NOTES.
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

14. Best In France: LUSH Cosmetics
Presentation Outline
Company Overview
Lush in France
Conclusions
The LUSH Future
Advice from LUSH France
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

15. Best In France: LUSH Cosmetics
The LUSH Future
Future Plans for LUSH in France
Franchise Expansion
« 30 to 40 new stores »
Risks identified for LUSH
More and more competitors
Increasing costs
Some products may be inadequate in the french market
FUTURE PLANS FOR LUSH IN FRANCE
- LUSH wants to expand, but they still want to maintain their “rarity” factor
- The LUSH brand is not a luxury, but it does have value, and the “rarity” factor emphasizes that value
- LUSH Store in Paris is profitable, but LUSH France is not yet profitable. LUSH must expand in order to become profitable. There are concerns about how long the legal side of Franchising will take.
RISKS FOR LUSH
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

16. Advice From LUSH France
Get information about the business
Distribution network
Market
Flexiblility is key
The need for strategy
- Have a set idea of where you are going
FLEXIBILITY IS KEY
- Important, because the company has endured the high costs and the struggle to find a location, and it is doing great with sales.
History
LUSH in France
Conclusions
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics

17. Best In France: LUSH Cosmetics
Thanks & bibliography
Thanks to Emilie (Communication Director of Lush France)
Bibliography
Data Monitor
Organic Monitor Study
Euromonitor International
NEED: add all sources used
Best In France: LUSH Cosmetics
Best In France: LUSH Cosmetics