Lush has taken a positive approach to its future in Hong Kong following the closure of its Central flagship store at the end of last month.
But it has criticised the city’s landlords generally for failing to share the burden of a decimated retail market in the wake of the pandemic.
In an email to Inside Retail Asia the beauty products company said the decision to close the five-storey flagship store, and its first spa in Asia at the end of its lease took “much consideration”.
Lush said that all of its other stores in Hong Kong and Macau will continue to trade as usual.
The Soho Square store’s closure reflected the challenges of dealing with reduced footfall during the Covid-19 crisis, the impact of “previous conditions” and a lack of early response from landlords and government to help struggling businesses.
“The pandemic has challenged many businesses around the world. Unfortunately, the measures to help in Hong Kong have been very late. Up until the end of January we had received little support from landlords or the government. However, the measure on salaries is very much needed and we are grateful for this.
“Even though we are saying goodbye to Lush Soho Square Shop & Spa, we want to highlight the achievement of the team in the past five years and thank them for all their hard work. We have loved bringing the spa experience to customers in Hong Kong and we hope they have enjoyed every moment.”
Elsewhere in Hong Kong, Lush has been engaging with landlords across the two territories because rent accounts for the majority of costs to businesses of all types.
“We know it is also difficult for our landlords and as property owners, they also have a vested interest in the future of the retail industry,” Lush said in its email. “We would like to thank our partners who have to date been open to constructive discussion and particularly for those that have given discounts of 50 per cent and above.
“[But] this isn’t the time for one party to take all and one party left with all the burden. We believe there is collective social responsibility, and landlords and retailers should work collaboratively together to ensure retail survives in Hong Kong, which will benefit the local people and economy that in turn supports property owners that need rental tenants.
“Some landlords gave us a slight discount on rent in February and March, following negotiations with us. However, this is not reflective of the reality we are facing. We have been in continual negotiations of the rent relief and payment plan with the landlords, and we are confident of keeping things under control with our strategic property plans, and where governments have offered pay schemes and guarantees we are making use of these to ensure staff payroll is protected as much as possible whilst there is little money flowing into the business.”
Meanwhile, over the past few months the company has worked to have a positive impact on the local communities during the pandemic.
Underpinning the message of washing hands to keep the virus at bay, Lush donated more than 8 tonnes of soap to healthcare workers, non-profit organisations and minority groups.
“We strongly believe that this is the time we have to help each other locally to overcome the unpredictable challenges so that we can support a positive future together.
“We look to the future with optimism and sincere gratitude to our incredible staff and community. We are doing our best to make decisions and operate the only way we know how: honestly and transparently.”
Lush founder Mark Constantine said the pandemic may bring many long-lasting changes to the way people live their lives.
“Lush needs to adapt to these changes, stay agile and relevant, whilst holding true to our principles of being a business that is kind and caring. We will need the help of everyone as we enter this next phase.”