Lush in Russia covered itself with "Leaf" - Newspaper Kommersant No. 181 (7382) of 09/30/2022

Against the backdrop of the departure from Russia of the British cosmetic chain Lush, the co-owner of its local division, Dmitry Azarov, has conceived a new project in this segment. We can talk about a chain of stores and the production of cosmetics in the Moscow region under the Relish brand. Starting your own business will require a significant investment in product development, and the cosmetics market remains highly competitive.

The CEO and co-owner of the Russian division of the British cosmetics company Lush, Dmitry Azarov, established List LLC in Moscow at the end of August, follows from the data of the Unified State Register of Legal Entities. The main activity of the new structure is the production and trade of perfumes and cosmetics. In early September, List also filed an application with Rospatent for the registration of the Relish trademark. The list of goods specified in the document includes cosmetics, soaps, skin creams, shampoos, bath products, lotions, shower gels, etc. In September, the Russian Lush profile on the HeadHunter portal also featured vacancies for cosmetics cooks in Domodedovo Moskovskaya areas. “Kommersant” sent questions to the e-mail address “List” indicated in the Unified State Register of Legal Entities, but did not receive a prompt response.

Lush has been operating on the Russian market since 2001. In the local division of Lush Russia LLC, 65% belongs to Dmitry Azarov, the rest belongs to the British Lush Cosmetic Ltd. In March, after the outbreak of hostilities in Ukraine and a new wave of sanctions, Lush announced the suspension of the supply of its products to Russia, and then began the closure of local stores. Until February 2022, almost 50 outlets operated under the Lush brand in Russia, and as of September 29, nine outlets remained open in Moscow, St. Petersburg and Krasnodar.

A Kommersant source in the retail real estate market confirmed that the management of the Russian Lush, after stopping the supply of brand products to the country, was considering the possibility of opening stores under a different sign, where goods of the British brand and cosmetics from other manufacturers were to be sold. But, the interlocutor of Kommersant adds, this concept could already be transformed.

The executive director of the Association of Producers of Perfumery, Cosmetics, Household Chemicals and Hygiene Products, Petr Bobrovsky, considers it logical for the new brand to produce and sell relatively easy-to-manufacture cosmetic products, such as soap or shower gels. Since all or part of Lush's formulas are likely to be trade secrets and are unlikely to be shared, launching production will require significant investment in formulation development, product testing, obtaining approvals, etc., he points out.

In addition, Mr. Bobrovsky adds, the market for perfumes and cosmetics is very competitive, especially in the segment of "natural" cosmetics, where there are many small and medium-sized players. Although, he adds, the new brand could potentially retain some of Lush's loyal audience by placing stores on the site of the British chain's outlets. Olga Antonova, partner, head of the commercial real estate department at the Commonwealth Partnership, notes that Lush has had no analogues in Russia for a long time. And Marina Malakhatko, head of the CORE.XP retail department, adds that the new brand will also have to carefully build a development strategy. So, according to her, new products will not be able to be sold in the price category in which Lush was present.

380 billion rubles

were cosmetics sales in the first half of 2022, according to Infoline estimates.

Stores with a similar assortment often open in place of foreign brands leaving Russia. Thus, the French perfume brand L'Occitane handed over the business to local top managers who are developing the network under the guise of L'Occitane. And Inventive Retail Group (IRG) on Thursday announced the opening of brick-and-mortar retail project World of the Bricks on-site LEGO stores, which may also feature IRG's own-brand toys.

Alina Savitskaya

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