By  on October 10, 2007

NEW YORK — Lush Fresh Handmade Cosmetics Ltd. plans to open in-store boutiques at select Macy's Inc. locations as part of the British beauty brand's expansion into the U.S. market.

"America is one of those later markets for us," said Mark Constantine, Lush's managing director. "We're now starting to get more bullish there."

The Macy's deal calls for Lush to establish "licensed departments" within Macy's units, according to the beauty brand. Lush will open 100 shop-in-shop concepts within Macy's cosmetics departments in the next three years, said Mark Wolverton, Lush's North American chief executive officer. The first 11 Macy's locations, which will range between 300 and 700 square feet, are scheduled to open by the end of this month.

Lush first tested the concept two years ago at Marshall Field's on Michigan Avenue in Chicago, a store that has since been converted to a Macy's. The 372-square-foot space generated about $1.7 million in retail sales during the first year, said Wolverton. Macy's later decided to roll out an additional five locations in select northern Michigan and northern Illinois Macy's stores.

In addition to expanding its store-within-a-store concept, Lush is working to expand its freestanding store base in the U.S. and Canada. Last year, the brand opened 20 stores and plans to open an additional 30 locations by next June. Wolverton said he aims to open more than 300 North American stores.

Lush has more than 475 stand-alone stores and shop-in-shop concepts worldwide in 40 countries. The 12-year-old bath, body, hair and skin care brand's retail strategy is billed as a "bakery-styled concept."

The company is also starting to broaden its presence in airports, Wolverton noted. Currently, it has two airport locations, in Orlando, Fla., and Toronto.

According to industry sources' estimates, Lush could generate about $90 million in retail sales in North American by June. Wolverton expects the growth to increase sales in the U.S. by 45 percent over the next three years. U.S. sales now make up about 70 percent of North American sales, which in turn account for 25 percent of total global sales.

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