Top Companies Report

15. Kosé

August 6, 2012

Japan
www.kose.co.jp

Sales: $2.0 billion

Key Personnel: Kazutoshi Kobayashi, president.

Major Products: Skin care, cosmetics and toiletries sold under several brand names including Cosme Decorte AQ, Awake, Cosme Decorte, Beauté de Kose, Jill Stuart, Infinity, Grandaine, Crie, Predia, Visée, Phil Naturnt, Esprique, Sekkisei, Formule, Precious, Fasio, Nature & Co, Stephen Knoll, Happy Bath Day.

New Products: Cosme Decorte de la Vie (hair care), Cosme Decorte Lacouture (makeup), Paul Stuart (men’s skin care), Grandaine Luxage Astamax (skin care) and Softymo mineral wash (cleanser).

Comments: Sales fell 2.7% after declining nearly 1% the year before. International sales accounted for 12.7% of total consolidated sales, but the segment fell 1.3% during the year.

Kosé noted that the Japanese economy was severely impacted by the Great East Japan Earthquake that occurred on March 11, 2011, but there was a slow recovery during the second half of the fiscal year. Still, according to data from the Ministry of Economy, Trade and Industry, there was an increase in sales volume but a decrease in monetary sales in calendar 2011 compared with 2010.

In Asia, the Chinese economy continued to expand but economic growth stalled in other areas with only a few exceptions, according to Kosé. In this difficult environment, the company, Kosé executives decided to switch from “defensive reforms” to “offensive reforms.” One objective is to make core brands in Japan even more powerful. At the same time, the group is expanding overseas operations and new businesses that have growth potential. In addition, the group is taking measures in response properly to limitations on the supply of electricity and the environment for procuring raw materials as well as reinforcing the base of operations. The goal is to build a framework for business operations that can adapt with flexibility to shifts in market conditions.

By product category, Kosé invested in the Cosme Decorte brand and other value-added products sold at stores that provide counseling to customers. There were also effective advertising and sales promotion activities to increase the number of customers, such as giving the Esprique brand a new image. Kosé entered new business domains by introducing prestige cosmetics for men and establishing an e-commerce subsidiary for the full-scale launch of an e-commerce business.

This year, Kosé expects sales to rise 2.7% based on three initiatives: strengthen mass market businesses, cut the cost of manufacturing products and improve labor productivity. Company executives are hoping government economic initiatives provide a lift to Japan’s economy, although they admit Japan’s long-term deflation, European debt and rising energy costs are difficult problems to solve.


 
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