Macy's Hosts 100th Location for Fast Growing Lush

(MoneyWatch)  British cosmetic retailer Lush just opened its 100th store in the United States that also happened to be its 37th operating in a Macy's, and, despite the recession, is looking forward to opening up to 30 more outlets in its current roll out across the country.

The numbers suggest Lush is finding a niche in the U.S. and also that Macy's can demonstrate a nice flexibility in developing partnerships when it so desires.

Lush is counting on product, store experience and price to ensure it can grow in the weak economic environment. Mark Wolverton, president and ceo of Lush North America, pointed out that "65% of our products run under $10," making them an economical choice in tough times. Yet, Lush doesn't create a bargain basement environment and, in fact, throws customer parties and runs other promotions regularly that can pack a store with 400 customers, he said. Everyday, customers are enticed by the aromas emanating from the items populating Lush stores. The cosmetics are based on fresh ingredients including lime, banana, papaya, strawberry and other natural and whenever possible organic antecedents, and they even come with sell-by dates. Manufacturing, which in North America takes place in Toronto or Vancouver, is fully vertical, so, Wolverton points out, Lush has control of its product quality and manufacturing costs.

The relationship with Macy's began in 2005 in Chicago when Lush, faced with a shortage of appropriately sized real estate on Michigan Avenue, decided to fulfill its ambition to operate on the Miracle Mile by approaching Macy's about some street side space in its store there, then a Marshall Field. The Lush shop there went on to do a whopping $4,000 per square foot in sales, Wolverton said, so Macy's and the cosmetics retailer expanded their relationship. Lush opened shops in what is now Macy's on State Street in Chicago and in a suburban Oak Brook, Ill., department store. When those proved successful, Lush expanded its Macy's shops to a limited presence in each of the company's operating divisions in preparation for a broader launch that reached 37 in Sacramento on Feb. 7.

While that represented number 100 for Lush in the U.S. ?€" it also has about 48 stores in Canada ?€" the company didn't take a breather at the milestone, and it has been in the process of opening two additional stand-alone California locations, one in Emeryville, near San Francisco, and one in Anaheim.

Lush has 130 total stores in mind for the current phase of its roll out, Wolverton said, but the recession is weighing in and he said the retailer would be opportunistic, taking only superior real estate and passing on secondary sites. One benefit of recession, at least for Lush, is that better real estate is coming available as weaker retailers fail.