Lush Cosmetics to close stores and factory in Brazil

By

Fernanda Baldioti

Published
May 16, 2018

British cosmetics brand Lush is leaving Brazil for the second time. In an official release, representatives from the company revealed that it would be closing its stores and factory in the South American country on June 20, explaining that the business has not been able to make a profit over the four years it has operated in the country. 

"Brazil is a very difficult market in which to operate a British brand. Despite growing sales, after four years of dealing with losses, high taxes, the prolonged economic recession and now political instability, it has become impossible for Lush to continue to invest in the county and make a profit", stated the company. 

Until the end of Lush's operations, products will be sold at a 50% discount, with the exception of the brand's Charity Pot moisturizer and accessories such as bags, sheets and pots. Lush's online store and customer support line will remain live until August 31. 

"We've loved serving you and we'd like to thank you for all your passion and enthusiasm for our products and brand over the last few years," the brand said on its Brazilian Facebook page.

Lush currently has five stores, an e-commerce site and 129 employees in the country. Its factory, in Bom Jesus dos Perdões, in the state of São Paulo, employs 44 people. Worldwide, the brand operates 932 stores and 38 e-commerce platforms in 49 countries.

Through the sales of its "Charity Pot' body lotion, the net profit from which is donated to NGOs, the company has made approximately R$280,000 ($76,668) in Brazil, with R$127,000 ($34,775) going to 23 different organizations. According to the company, donations to Brazilian projects will continue until there is no more money left over.

The British brand manufactures its handmade products with natural ingredients, opposes animal testing and avoids unnecessary packaging. The company already pulled out of Brazil once before in 2007. That time around, the expansion didn't work out for logistical reasons: as Lush's products are fresh, they arrived in Brazil with reduced expiration dates. Legal issues further complicated the company's first foray into the country. Since 1999, the company had been operating through franchises headed by São Paulo-based businesswoman Sandra Isper Rocha and her partner, architect Léo Shehtman. In 2007, Rocha took Lush UK and her former partner to court for breach of contract concerning use of the Lush trademark in the country. The case was dismissed for timing reasons but Rocha managed to overturn the decision in Brazil's Superior Court of Justice at the beginning of the year. Lush stated that these legal proceedings had no bearing on the company's decisions to close its doors in Brazil. 

In 2014, Lush decided to return to Brazil with 30 stores and, in an attempt to resolve the issue of expiration dates, its own factory. 

"We will continue to contribute to the local debate about animal testing and to source many of our ingredients – from tonka beans to fair trade organic honey – directly from local Brazilian communities. This is not goodbye," concluded the release.