POOLE’S global cosmetics brand Lush was looking like “dead meat” at the start of the pandemic but has returned to profit after shedding a quarter of its staff, its boss has said.

Latest accounts, for the year ending June 2021, show Lush shop sales were down 42 per cent compared with pre-pandemic times in 2019.

But they were partly offset by online sales rising 130 per cent.

Turnover for the year in question fell 6.6 per cent to £408.7million, but the company made a pre-tax profit of £29.2m after a £45.2m loss for the year before.

Co-founder and chief executive Mark Constantine told the Daily Echo: “We thought we were dead meat.

“We didn’t know we were going to survive at all and then to have that timely help in a practical way from the government, I wouldn’t say it was a miracle but you don’t expect timely help from the government somehow. You expect endless red tape but they did move quickly and things were available.”

The number of people employed by the Lush group fell from 11,687 to 8,638. Retail staff fell from 8,048 to 5,369 and manufacturing from 2,070 to 1,572.

However, staff numbers in digital rose from 379 to 577.

“The sales went down 25 per cent, the workforce went down 25 per cent,” said Mr Constantine.

“We didn’t shut loads of shops, we just reduced the people serving in those shops.”

Lush received £21.9m from furlough and other government schemes across the world. In the UK, it also benefited from £6.2m in rates relief on its stores.

But if Lush had disappeared, it calculated governments would have lost £7.2m in corporation tax, £6.7m in property taxes, £29.8m in employers’ payroll taxes and £77.8m in sales taxes, as well as £36.2m in taxes from its staff, based on 2019 figures. 

“Why would the government invest in companies? Because the revenue that they receive is so substantial that not to invest would be foolish,” said Mr Constantine.

The company has 15 stores in Ukraine and 48 in Russia, all licensed to a Ukrainian-born Russian operator.

It has stopped supplies to the Russian business but is putting money into the Ukrainian staff’s bank accounts over and above their normal pay, as well as supplying grants from its charity pot.

“What we’ve done is made sure that they have money in their account at all times. We put a large sum of money aside to ensure that because we worked out fairly early on that that was the key,” said Mr Constantine.

It is also in talks about welcoming Ukrainian refugees to jobs in the UK, all of which attract the voluntary living wage calculated by the Living Wage Foundation.

During the past year, Lush abandoned social media platforms including Facebook, Instagram and TikTok, as well as the messaging service Snapchat.

The annual report lays out plans for sustainable growth and says the business is “still very much committed to physical retail”.

Mr Constantine said the move away from social media had not had the impact some had predicted. “I think we’re starting to see that some of that is the emperor’s new clothes,” he said.

“I think it will take a long time, it will take a decade at least, but I do think we’re going to see more and more business coming back to the high street especially with the rents dropping. If the rates get sorted out, the combination of both would be quite spectacular.”