Top Companies Report

27. Fancl

August 6, 2012

Japan
www.fancl.jp

Sales: $874 million

Key Personnel: Kazuyoshi Miyajima, chairman and representative director; Yoshifumi Narimatsu, chief executive officer and representative director; Kazuyuki Shimada, director, executive managing officer; Haruki Murakami, director, executive managing officer; Kenichi Sugama, director, executive managing officer; Mayuko Yamaoka, director, executive officer; Toru Tsurusaki, director, executive officer; Jyunji Iida, director; Akihiro Yanagisawa, director; Norito Ikeda, outside director; Yasushi Sumida, executive officer; Norihiro Shigematsu, executive officer; Yoshihisa Hosaka, executive officer; Yoshiyuki Nishi, executive officer; Mitsuko Yazaki, executive officer.

Major Products: Cosmetics and skin care sold under Fancl and Attenir brand names, nutritional supplements including Tense Up, a beauty product.

Comments: Corporate sales of $1.05 billion were down 6% for the year ended March 31, 2012. Cosmetics sales fell 3.9% to just under $550 million and its nutritional business sales fell 4.3% to approximately $324 million.

Within its cosmetics business, the Fancl and Attenir brands reported that their sales fall 2.8% and 6.5%, respectively, to $436.8 million and $97.8 million. The firm said the sales dip at Fancl came from restrained purchasing prior to a rebranding effort, despite firm sales of the brand’s Mild Cleansing Oil, Facial Washing Powder and other principle products. There was a similar tale at Attenir, as sales skidded despite a “firm showing” from renewed and re-released Class A Basic Skin Care, according to the company. Fancl’s “other” cosmetics business tallied sales of $14.3 million, down 16.5%.

The largest sales outlet for Fancl’s cosmetics business is mail order, and within that sector, cosmetics sales fell 4.9%. Retail cosmetic sales fell 3.6% and wholesale/others fell 11.9%. On a positive note, overseas cosmetics sales posted a 3.5% gain, according to the company.

Fancl’s nutrition business also took a hit this past year as sales sunk by 4.3%. Specifically, sales of Tense Up beauty supplement declined and other products dropped too, following restrictions on the imports of foodstuffs by the Chinese government.

Fancl’s other operations (including kale juice) accounted for just over 17% of total corporate revenues, coming in at $183.6 million.

With corporate performance sliding, Fancl has decided to give itself a makeover of sorts, including the reaffirmation of its commitment to cosmetics and health food products and sale of the Iimono Ohoku mail order business. The changes are aimed at achieving consolidated net sales of 101.0 billion yen for fiscal 2014, according to the company.

To reach that goal, company executives will establish Fancl as a global premium brand with a core focus on “preservative free” technology beauty products; promote the seamless expansion of a new counseling system throughout its mail order, direct and internet sales; and ramp up its overseas business.

In January, the company’s health business will begin official operations as the Fancl Health Science brand, offering expanded products for both middle age and elderly consumers.

 

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