Analyse how strategic and tactical decisions affect human, physical and financial resources through restructuring, investment, workforce, costs and capacity.
Extract A Lush promises to invest in UK stores after return to profit Ethical UK high street retailer Lush, best known for its highly scented bath soaps and handmade cosmetics, returned to profitability in the financial year 2021-22.
The latest statement of comprehensive income for Lush showed a pre-tax profit of £29m during 2021-22 compared to a loss of £45m in the previous year. However, turnover was lower at £408.7m, down from £437.8m in the previous year.
Lush operates retail outlets in 48 countries and has manufacturing facilities in six countries. It plans to attract more customers by investing in larger outlets with services such as health spas and hairdressers.
The business made no dividend payments to its shareholders in 2022. "We have to invest money now. We need to refit our shops." said Mark Constantine, one of the co-founders of Lush.
The group continues its policy of charitable donations, with Lush raising funds of £6.3m for several charities.
Extract B Selected cost and sales data for Lush's bath soap department
Extract C Lush boss Mark Constantine happy to lose £10m after leaving social media Ethical beauty brand Lush is expected to lose £10m in sales after leaving four major social media platforms. Lush's co-founder, Mark Constantine, shut its Facebook, Instagram, Snapchat and TikTok accounts. Its Facebook and Instagram accounts had 10.6 million followers.
Constantine said he had no choice and that it is a price he is willing to pay. He was concerned over research showing the negative impact of social media platforms on many teenage girls, key consumers for Lush. "We've tightened up during the global health crisis, it won't destroy us. We will find new ways to connect with our customers as well as using the older tried and tested routes," he added.
Extract D Lush has been 10\% employee owned since 2017 The employees of Lush and its ethics are at the heart of the business. In 2017, Lush shareholders gifted 10\% of the company shares into the Lush Employee Benefit Trust (EBT). There are five Trustees who look after the trust on behalf of the employees.
The purpose of having an employee ownership scheme is to: - protect our ethics - ensure the independent ownership of the business - maintain the bonus culture - promote two-way inclusive communication - give every Lush employee a voice.
Extract E We Believe - Lush's guiding statement for 25 years We believe in: - making effective products from fresh, organic fruit and vegetables, the finest essential oils and safe synthetics - making products by hand using little or no preservative or packaging, using only vegetarian ingredients, and telling you when they were made - buying ingredients only from companies that do not test on animals - happy people making happy soap, putting our faces on our products and making our mums proud - our products being good value, that we should make a profit and that the customer is always right.
Using Extract C, discuss the effects on Lush's financial resources of its strategic
decision not to use social media.