Lush to monitor the impact of Trump on US business

By Lucy Tandon Copp 14-Mar-2017

The cosmetics retailer says that it is remaining alert to changes in customers’ sentiments as a result of political factors

Lush has confirmed it will remain alert to the impact of President Trump’s administration on its US business.

In its Trading Statement released yesterday, Lush explained it will be “monitoring” the impact of the new Trump administration on its US market.

Strong performer

Lush is performing well in the US, where it operates as a joint venture.

The US is Lush’s most prevalent market for new store openings; in 2016, it opened 18 new doors bringing its total count in the region to 191.

Lush North America continues to make strong impressions globally, with its 2017 Valentine’s Day campaign prompting widespread conversation on social media.

The image featured a gay couple relaxing in a bath together. Many praised Lush for the candid nature of the visual.

Trump concerns

We believe that all people should enjoy freedom of movement across the world.

Since Trump was elected, Lush has not made any official statements on its political position, however, it is clear that the company does not agree with all of Trump's plans.

In February, Lush revealed its intention to launch a new hair product called Yuge, a variation on the word 'huge' often used by Trump for emphasis.

The product was unveiled at the Lush Summit held in the UK, alongside a 'star guest' that Lush described in a press release as “an orange-faced, tiny-handed man".

Yuge is a volumising hot-oil treatment, and comes as a bright blue hexagon attached to a stick. It is still in the process of being tested but will roll-out in the UK before the US.

Lush also spoke out about Trump's travel ban announced shortly after he was sworn in. Lush displayed the following message in the windows of its shops: "We believe that all people should enjoy freedom of movement across the world."

On Lush's website blog, the retailer has also criticised Trump's plan to build a wall on the Mexico-US border saying that besides the "likely impact" on human society, it would be a "disaster" for the border zone's ecosystems.

Political uncertainties

We do anticipate more difficult economic conditions in 2017 which may impact consumer sentiment.

Lush is making an effort to keep its employees and the public up to date on political events and their impact on business globally as well.

In its trading statement, Lush’s Founder Mark Constantine said: “We remain alert to changes in customers’ sentiment as a result of economic and political factors which have had an impact on our sales in Hong Kong and Brazil in particular.

“There has been no noticeable post Brexit impact on our UK sales although we do anticipate more difficult economic conditions in 2017 which may impact consumer sentiment.”

He explained: “We will also be monitoring the impact of…the potentially destabilising political landscape in Europe, and the impact of conflict and low oil prices on the economic prospects of the Middle East.”

Challenges remain

Lush’s success in the US is not reflected in all markets. In Japan, for example, Lush has struggled and is working on a four-year plan to return the property estate to profit.

Lush made an operating loss of £8.2m in Japan in fiscal 2016, which is £4.9m higher than last year. Lush closed 17 stores in 2016, which is described as “mostly low turnover” and located in “unsuitable” shopping malls.

However, it did open three new stores in central Tokyo and invested in nine relocations and ten refits. The investments are already paying off and have results in like-for-like growth above the average trend.

In Hong Kong, meanwhile, Lush suffered a significant reduction in footfall due to restrictions on mainland visitors and a slowdown of the Chinese economy.

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In Brazil, the company has put a halt on opening any further stores until the new financial year, as it assess the situation, leaving its total store count at five. Brazil is still home to one of Lush’s factories, which will soon start supplying Chile.