A FALLING-out between two key players from the early days of Lush has led to a court defeat for the Poole-based cosmetics giant.

Andrew Gerrie, who spent 20 years at the top of the company, decided to leave after relations “deteriorated” with boss Mark Constantine.

A case at the Court of Appeal centred on how to value the 22 per cent of shares in Lush that he and his wife Alison Hawksley wanted to sell.

Court papers tell how Mr Gerrie joined the business as an investor in August 1994, shortly after it was founded. He became chief executive.

The judgement says: “In 2014, relations between Mr Constantine and Mr Gerrie deteriorated, and for various reasons Mr Gerrie decided that it was time for him to leave the group.”

An employment tribunal in 2015 found by consent that he had been unfairly dismissed and ordered Lush Ltd to pay him the statutory minimum compensation of £87,710.

Mr Gerrie owned 11.62 per cent of Lush Cosmetics Ltd and Cosmetic Warriors Ltd, with his wife Alison Hawksley owning 10.38 per cent.

Mark Constantine owned 38 per cent and his wife Mo 24 per cent, with four others owning between one per cent and six per cent each.

Under Lush’s articles of association, other shareholders must be given the chance to buy any shares that come up for sale. The price must be agreed by the parties or set by two independent chartered accountants.

If the shares are not taken up at that price by the other shareholders, the seller has 90 days to sell them elsewhere.

Lush sought a ruling on how the accountants should value Mr Gerrie and Ms Hawksley’s shares. The case centred on whether they should just determine the price per share, or take into account the size of the stake.

Appeal Court judge Lord Justice Beatson dismissed Lush’s appeal. He said it was “unlikely” the rules expected the accountants to “apply a discount or premium” according to the size of the stake. The couple currently still hold their shares.

He also ruled that shareholders could sell to a corporate body, rather than just to another individual, if their fellow shareholders did not want to buy their shares.

Lush told the Daily Echo the appeal case dealt with a technical matter that needed clarification. It repeated a 2014 statement in which Mr Constantine said Mr Gerrie was a “lovely colleague and I have enjoyed his support over the years”.

It added: “However he has now decided to go and do his own thing away from Lush. Andrew is someone who will tell you something sometimes in only a few words and you have to quickly grab them as they are very precious and then take them away and work with them. I’m very curious to see what he does do in the future and how he will manage without me too. I shall miss him a lot.”

Mr Gerrie, now chairman of Hotel Chocolat, could not be reached for comment.