Mark Constantine: Lush
Mark Constantine, co-founder of cosmetics chain Lush, on staying true to his values and shunning the corporate pound.
At a time when entrepreneurialism is encouraged and celebrated, hearing it described as “a psychological problem” by one of Britain's most successful owner-managers comes as a surprise.
But Mark Constantine, co-founder of cosmetics chain Lush, has given a lot of thought to the origins of entrepreneurial drive, and is convinced it comes from a dark place. You wouldn't know it though, by looking at what he has created. Lush is a brand for which subtlety is nothing, and brash, energetic vibrancy is everything. Its 650-plus stores around the world are full of teetering piles of soaps, shampoos and bath bombs. If Willy Wonka diversified into bath stuff, these stores would be the result.
The business was co-founded by Constantine and his wife Mo in 1994 and today its biggest market is Japan, with the US close behind. With £215m in sales, plus a glowing reputation as an ‘ethical' entrepreneur, and a company regularly named among the best to work for, you might expect Constantine to be pleased with what they've achieved, but he rejects any hint of self-satisfaction. It's been a bumpy road to the point he's at now, one that perhaps prevents complacency. It was through his first business, hair and beauty products group Constantine and Weir, that he met fledgling entrepreneur Anita Roddick, who had just opened the first Body Shop outlet in Brighton. Finding Roddick a like-minded soul, Constantine and Weir became the main supplier for the growing Body Shop, and was eventually bought out by Roddick for £11m in 1984. Cosmetics to Go came soon after, a mail order business which went bust in 1994. The offering proved popular with customers – too popular in fact, as the reality was that the business was losing a pound with every order. “And we got a lot of orders,” Constantine says glumly. “It seemed at that time that we'd had 15 years of good luck and all the bad luck in one short period of time. It used to be very painful even to talk about,” he says. “It was tough. Business is tough sometimes.”
You get the impression though that Constantine is somewhat hard on himself (“I certainly appreciated going bust in modern society rather than Victorian society, when I'd have had to go round the back with a revolver and finish myself off,” he semi-jokes), and it took him a while to raise his head above the parapet again. “You have to overcome the shame. You really just want to hide somewhere, curl up and die and not do anything. But you have to do something because you've got a son going ‘why don't you get a proper job dad?' which is exactly what Simon said at the time.” Getting a ‘proper job' wasn't on the agenda (luckily for Simon and his siblings, all of whom work at Lush today) and customers and suppliers – among whom the company was very popular – were telling the founders to get back to what they do best. And so, as soon as the non-compete agreement with The Body Shop expired, Mark, Mo and the other Lush co-founders started selling again – no longer by mail order, but through shops. With a similar focus on the integral part that ethics should and could play in a business, Anita Roddick and Constantine remained friends, until Lush offered to buy The Body Shop in 2001, an offer dismissed by Roddick as an early April Fools' joke (“Mark is too small. He is a great guy and great prankster,” she was reported as saying). The relationship soured; the eventual sale to L'Oréal seems to have been the final straw. Constantine even ran a two-week poster campaign outside the shops entitled “Fed up with the BS?”. He pauses now when asked how he felt. “Cross,” he says finally. “Until Anita died. And then….sad. “She was very irritating. And very lovely. And you look back on it and think – she must have known how ill she was when she sold it, and I never really appreciated that and was critical at the time, but looking back on it now, I don't know what I'd have done had I known what she knew.” After the Body Shop acquisition, Constantine set out to make Lush a business that wore its values on its sleeve. It is anti-packaging, has a stringent animal testing policy suppliers have to abide by, and its buyers seek out community projects to buy ingredients from. Its campaigns include: ‘Why Biofuels Are Not Green'; ‘The Problem With Palm Oil'; and ‘Save Sharks Around The World'. If anything though, Lush's reputation as an ethical business only makes Constantine angry. His disgust with the low standards demanded of businesses is palpable. Raising the bar “If we're one of the best companies, God help everyone else,” he says. “When you have businesses dipping in the gutter, someone only has to be ‘alright'. We're not a marvellously ethical business, we're alright. We're just not really really naughty and crap.” Despite the increasing size of Lush, Constantine's antipathy towards a ‘corporate' way of doing things (the business doesn't advertise or have a marketing department, for example) means it retains a small business feel. The mercenary behaviour of businesses when they get to a certain size makes Constantine livid. “I mean, estate agents. Why isn't there a bloody ethical firm of estate agents? No matter what you want to do with an estate agent, you're going to be pissed on by them, aren't you,” he says. “So there is a great opportunity there for someone to just say, right, these are our standards, we won't do this, this and this. This is how we behave. Then we could all go to them. “L'Oréal owns The Body Shop and Lillian Bettancourt is reportedly busy bribing the prime minister of France, and using the finance director to advise her on her tax – that's not good enough. We all know it, she knows it. It's disgraceful. And we're just saying don't do that. Just behave like the rest of us, that's all we require of an ethical business: the most basic standards of good behaviour. You don't have to be anything exemplary to be ethical. “We just sell cosmetics and soap and things like that,” Constantine adds, incredulous. The impact on Constantine of the circumstances surrounding the closure of Cosmetics to Go is clear to see, as – vulture-like – others took advantage of the company's perilous situation when it was teetering on the brink of administration. A glimmer of hope came through talks with a major high street retailer which wanted to buy the company. On the cusp of a deal, the retailer pulled out, leaving Cosmetics to Go facing administration and 200 people unemployed. No surprise Constantine indulges in gleeful schadenfreude when talking about the problems the retailer is facing today. “There were a lot of naughty things that people did. One of our properties got flooded and the insurance company wouldn't pay out – because if they hold out and you go under there isn't a claim. Every single naughty thing that can occur starts to.” The problem with exits Unsurprisingly after The Body Shop's sale, it seems nothing is more disappointing to Constantine than founders who put their heart and soul into creating their business, only to sell it as quickly as possible. He says this comes down to a sense of responsibility towards customers. “If people are buying your product, hopefully they're buying because they like it. But beyond that, they also think ‘I like this company and I like supporting them. That's goodwill. And how you deal with goodwill is important. If you're just going to sell that goodwill – it doesn't matter to whom – somehow that seems to deny what you've been given by the customer. When a customer gives you that, you're not allowed to fiddle with it. There's a responsibility that comes with taking the money associated with that goodwill.” For this reason he remains adamantly opposed to taking equity investment. “Nearly all ‘ethical businesses' get sold to large corporations because people couldn't resist the money, or more often, they got into trouble somewhere along the line and took investment. They'd already sold their soul to the devil and it's all over. That's nearly all of them – Anita did that early on, Ben and Jerry's did that, Innocent did that. It's all bullshit. If you have a reasonable business and you take it steady and don't want to go further than 30% a year, it's perfectly possible, with some help from the bank, to take your business anywhere you want.” He is therefore now looking into succession within the company, and has spent time visiting other businesses that have been passed down to the next generation in order to preserve culture and values. His three children all work within the business, and children of the other co-founders might also be interested in becoming more involved. He outright rejects selling or floating, and the founders now own the entire business after recently buying the banks out. What this means for him is the possibility of staying involved with Lush, something he fully intends to do, naming Steve Jobs as an inspiration. “When he was thrown out, that was the norm,” he explains. “You thought that as an entrepreneur you were there to do so many years and then someone else would take the helm, someone better capable of taking the business to the next level. It was useful to see you didn't have to be dispassionate. He doesn't lose that passion.” The making of an entrepreneur How this passion manifests itself with Constantine is in a perfectionism that he admits can be trying for the people he works alongside – he was “banned” from store openings for a while due to a conviction things weren't quite right, “which was a bit hard on people who had been working very hard to get the shop open,” he cheerfully concedes. “So that's what I mean by a psychological problem.” Constantine believes the roots of his ‘psychological problem' go back to a tough childhood, something he says he shares with many of the driven people he works alongside. “My original partner found her mum dead on the floor. Most people have got some pretty interesting stories and I think it's pretty basic – you're trying to impress someone that doesn't exist. There's no one there to say ‘actually, well done, you've done enough now, well done son'. If you haven't got someone who says ‘well done son', you just keep on going.” Constantine's father left the family when he was only two (a few years ago he created a perfume called Dear John which reminded him of his absent dad). A turbulent childhood saw him leave home at 16 and spend time homeless, even living in the woods at one stage. The extent to which he sees his career choices as informed by these experiences is hard to over-emphasise. “Lots of people want to be entrepreneurs and talk about learning to be entrepreneurs. Well, let me just kill one of your parents early on, that'll do the trick.” It's hard to tell if he's joking. Retail environment Lush has proved recession-proof. Last year sales grew by 40% thanks to a healthy international market, which makes up over two thirds of turnover, and the business, which saw a pre-tax profit of £13.9m, has started to roll out spas as well as shops. Today Constantine finds the British retail environment among the hardest: “British retail is hard; Japanese is easier, American retail is more profitable,” he says. He identifies business rates as being the main problem: “If I were in charge, I'd have eliminated business rates on British high streets and put VAT up to 20%. That would create a thriving healthy high street which would attract a lot of retailers back. They now charge landlords when they're empty to encourage them to bring their rents down but that doesn't really work.” Were he starting Lush today, it would be a much trickier proposition, he admits, but advocates an all-or-nothing approach. “I'd make sure I took a primary site in a really major street. If you can get a central London site, you pay more, but you increase your chances of success and if you need to get rid of it, it goes. If you're going to take a gamble, take a big one.” Does that reflect what happened with Cosmetics to Go? “Yes. There's no point going bust over 45 quid is there?” His role in the business is extremely hands on, but his passion (along with bird watching, about which he is obsessive), is creating the products sold in Lush stores. The business holds 38 patents and he's proud of this focus – the continual overhauling of products keeps the offerings fresh and makes the business less vulnerable to innovative competitors. “We do creativity every day. Between 55 and 75 are the most creative years of your life, and I'm maximising my life in that way. I love it. Part of the reason I'm not frightened of the company anymore is because it's such a pleasurable place to work.” Even if it weren't though, Constantine would be turning up every day, driving the business, himself and his colleagues to greater heights. What's he aiming for? He thinks for a while. “A taxi driver asked me not long ago ‘why does a man need 600 shops?' and I still can't answer it.” Constantine on:
- his hiring strategy:
Employ passionate, enthusiastic, ethical people. Employ the fanatics. Employ the crazy people that other people won't employ because they're too crazy.
- mail order businesses:
British mail order is shit. Running Cosmetics to Go was one of the hardest periods of my life, actually. Going bust was hard but running the business was harder.
- not being frightened:
I went through a period when I was a bit frightened of the business. People who have very corporate businesses are rather frightened of them. If you're frightened you're constantly putting in layers and fiddling about because you don't know what you're doing.
- the advantages of being independent:
If you don't have any shareholders you can pretty much say what you like. If you're half owned by Coca-Cola you can't start running around saying ‘close Guantanamo Bay' like we did.
I'm grateful society has room for us. I don't choose to wake up and do that every morning, I just do it.