What's hair today is gone tomorrow. Shiseido Co., Ltd. will sell its Carita and Decléor brands to L'Oréal. The two beauty giants began negotiating on the the deal back in October, 2013. It is expected to close in the near future, subject to regulatory approvals.
Shiseido is selling the brands as part of a group-wide effort toward pursuing a strategy based on "selection and concentration," with the aim of making its strong fields stronger and its large fields larger, while generating higher profits from highly profitable fields. Accordingly, the company has conducted a thorough review of operations in order to ensure sustainable growth of business, including within the professional division. It was alongside this strategic development that the company received an offer from L'Oréal, involving the proposal for the sale of Carita and Decléor activities and engaged in exclusive negotiations.
"Carita and Decléor have contributed to the strengthening of the presence and the improvement of the prestige image of the Shiseido Group," the company said in a statement. "We have determined to sell the brands while undertaking rigorous efforts toward pursuing a strategy based on selection and concentration and we believe that it will be the best choice for both our company and the brands. Herewith, for the fiscal year 2014 and beyond, we will further accelerate growth to become a global player representing Asia with its origins in Japan."
Going forward, within the professional division, the company will focus on Shiseido Professional, which is said to be growing significantly in Asia including Japan and China, and Joico, which is expanding in the US as well as in Europe, to make the most of its strength in the hair business area. In terms of region, the division looks forward to accelerating business deployment in Asia, where the professional hair care market is growing rapidly. Carita and Decléor, which have deployed skin care businesses, among others, mainly in Europe, are the brands that have strengths in the business area different from those of hair and Asia on which the company will focus within its professional division. Accordingly, the company has determined that it will be the best choice for both the Company and the brands to sell the brands to L'Oréal and reached an agreement with L'Oreal to purchase Carita and Decléor activities. For the Shiseido Group, the Professional Division is a core business, next to cosmetics, and the Company will remain committed to becoming a leader in the Professional industry in Asia.