Lush may invest abroad due to Brexit

Image source, Lush

British cosmetics firm Lush says future expansion might have to be outside the UK, due to risks over Brexit.

The company recently opened a plant in Germany and says further expansion of manufacturing and buying operations might have to be abroad.

It blamed a "severe" skills shortage in the UK and said that Brexit could potentially make that situation worse by restricting the movement of workers.

Lush said 20% of its UK workforce are not UK citizens.

European members of staff "felt unwelcome and understandably upset" by the vote in favour of Brexit, Lush said in comments accompanying its latest trading statement.

Staff that wanted to leave the UK have been offered jobs at its operations in Germany, and 80 have taken up that offer.

'Reviewing options'

The company, which is known for its fizzing bath bombs and soap said: "Lush has flourished from the freedom of movement of people and goods, and now we face uncertainty in both of these areas.

"The negotiation of new trade agreements could take years, but the risk is that we will be paying more import duties across the business.

Image source, Lush

"Having opened our new Germany manufacturing facility during the year we will be reviewing other options for growth outside of the UK."

Lush has 931 stores in 49 countries, with manufacturing facilities in seven countries.

The Lush plant in Poole, Dorset currently supplies 20 countries.

In its financial year, which ended 30 June, Lush reported sales of £723m, up 26% on the previous year. Pre-tax profit was £43.2m, a 76% jump.

Last year the company donated more than £10m to charities and other good causes.

The company's current financial year got off to a strong start. Sales in the six months to 31 December were up 22%.