Lush Holds Out From the Sellout

The founder of Lush Fresh Handmade Cosmetics spoke with Karen Mazurkewich of the Financial Post about the buyouts of companies like the Body Shop and Bare Essentials, all gobbled up by megacorps and hedgies.

"The deal that has Mr. Constantine rattled most is the recent sale of Burt's Bees to Clorox, a bleach manufacturer. "You couldn't have a more dramatic difference in image from a chemical bleach company and a natural cosmetics company based on honey and bees," he says.

Mr. Constantine says these deals are having a negative impact in the industry. "If all [natural-based companies] ever do is sell out to a large multiple, it gets very confusing, and in the end ethical consumption as a concept will just disappear," he says.The article continues:

Mr Constantine suggests that the buyout fever will eventually lead to a consumer backlash. He cites an informal survey on treehugger.com, which found that 48% of customers would abandon an ethical brand if they were bought out by a multinational.

Mr. Constantine, who is under immense pressure to sell, is not happy with the options. "I'm 55, and you have to start thinking about what's going to happen," he says. Like many businessmen, Mr. Constantine would like to expand the company, but this requires capital. If you go with a venture capitalist they might flip you fast to a company you don't want, he says. Mr. Constantine would like to see more ethical funds that "don't necessarily require a quick exit."

Until the market evolves he plans to hold firm to his company: "We are fed up. Ethical marketing has become an oxymoron." ::Financial Post

WHAT'S HOT ON FACEBOOK