Lush stores in Russia are expected to run out of stock soon, following the company’s decision to halt deliveries, CEO says

  • Lush stores in Russia will soon be out of stock according to its CEO, the Wall Street Journal reported.
  • The CEO told the Journal that Russian stores have three months’ supply.

Lush stores in Russia will soon be out of stock in Russia, according to its CEO.

The Wall Street Journal reported the news.

Mark Constantine, the company’s CEO, told the outlet that Russian stores had enough supplies for three months, but would struggle to keep the retailer’s Russian business operational when supplies ran out.

Lush said it halted online sales and shipments of supplies to stores in Russia earlier this month, but stores would still remain open. The cosmetics company operates 48 stores in Russia, majority owned by a Russian licensee, Dmitry Azarov.

“We couldn’t just insist that he close the stores because it wasn’t written in the [license agreement]“, said Constantine, according to The Journal.

Constantine also told the publication that the local franchisee is looking to reduce the number of Lush stores so supplies last longer. If the retailer obtained different products from a new manufacturer to sell in stores, Lush could respond with legal action, the CEO said, according to The Journal.

The CEO said the licensee, who has worked with Lush for about 20 years, is “looking for an alternative to us” but insisted that “no one is going to buy it,” according to The Journal.

“The stake will simply fall and [Mr. Azarov] will change its name and sell something different,” he told the outlet.

Lush’s Russian subsidiary did not respond to Insider’s request for comment regarding its partnership with Lush.

A number of companies suspended their operations in Russia in the weeks following the attack on Ukraine – including H&M, IKEA and Adidas. Other companies have struggled to close stores due to complex legal agreements with local franchisees.

Burger King’s parent company, Restaurant Brands International, recently said it wanted to close Russian stores but couldn’t because of a “complicated legal process” with the franchisee in Russia.

The owner of the company that controls franchise agreements for 190 Papa John’s stores in Russia recently told the New York Times that he doesn’t want to close the stores.

James T. Quintero