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 Presentation Outline 1. Company overview History and location The LUSH Business LUSH Positioning 2. Presentation of Lush France 3. Conclusions Best In France: LUSH Cosmetics 2 LUSH History and Location History – 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 LUSH in France Best In France: LUSH Cosmetics Conclusions 3 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 History LUSH in France Best In France: LUSH Cosmetics Conclusions 4 LUSH Positionning Sabby’s Ethical Values Lush HANDMADE Cosmetics Yves Rocher L’Occitane Essentials Fresh Line NATURAL Cosmetics Bodyshop Garnier Dior RETAIL Vichy Chanel LUXURY L’Oréal Paris Givenchy History LUSH in France Best In France: LUSH Cosmetics Guerlain Conclusions Customer relationship quality 5 Presentation Overview 1. Company Overview 2. Lush In France Why France ? Paris history and performance Difficulties Faced Adaptations Implemented 3. Conclusions Best In France: LUSH Cosmetics 6 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* History LUSH in France Best In France: LUSH Cosmetics Conclusions 7 France Cosmetic Market Retail Sales and forecast of Skin Care by Subsector: Value 2000-2005 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 2,782.8 3,030.8 3,266.4 3,432.5 3,609.2 3,810.3 Skin care 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 2003 2004 2005 2006 2007 2008 654.22 667.52 683.92 717.82 756.32 796.87 % of Region 11.52% 11.57% 11.60% 11.57% 11.53% 11.49% % of Globe 3.44% 3.43% 3.40% 3.37% 3.33% 3.30% Source: Philip M. Parker, INSEAD, copyright 2005, www.icongrouponline.coma moment when Best In France: LUSH Cosmetics 8 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. History LUSH in France Best In France: LUSH Cosmetics Conclusions 9 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 History LUSH in France Best In France: LUSH Cosmetics Conclusions 10 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 » History LUSH in France Best In France: LUSH Cosmetics Conclusions 11 Difficulties faced & relative costs DIFFICULTIES COSTS Finding the right location Paris Store: 1.5 years Lille Store: “the right price at the right time” Location search costs Delay costs Paris Market: « exigent customers » Customers are well educated Training costs Customers’ specificities Key money Seasonal employees Hiring process Franchise Legal constraints 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 12 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 History LUSH in France Best In France: LUSH Cosmetics Conclusions 13 Presentation Outline 1. Company Overview 2. Lush in France 3. Conclusions The LUSH Future Advice from LUSH France Best In France: LUSH Cosmetics 14 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 History LUSH in France Best In France: LUSH Cosmetics Conclusions 15 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 History LUSH in France Best In France: LUSH Cosmetics Conclusions 16 Thanks & bibliography Thanks to Emilie (Communication Director of Lush France) Bibliography – – – – – – http://www.beaute-test.com http://www.lush.com Data Monitor www.icongrouponline.coma Organic Monitor Study Euromonitor International Best In France: LUSH Cosmetics 17
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