Top Companies Report

6. Shiseido

August 6, 2012

Japan
www.shiseido.com

Sales: $8.6 billion

Key Personnel: Shinzo Maeda, chairman; Hisayuki Suekawa, president and chief executive officer; Carsten Fischer, chairman and chief executive officer, Shiseido Americas; Tatsuomi Takamori, corporate executive officer, domestic cosmetics business; Yoshinori Nishimura, chief financial officer.

Major Products: Skin care, color cosmetics, sun care, fragrances and toiletries. Brand names include Shiseido, Clé de Peau Beauté, Za, Tsubaki, Senka, Jean Paul Gaultier, Elixir Superieur, Maquillage and Bare Escentuals.

New Products: Bio-performance Super Corrective Serum, Advanced Super Revitalizer Whitening Formula and Advanced Super Revitalizing Cream; Benefiance WrrinkleResist24 Intensive Eye Contour Cream; Urban Environment Oil-Free UV Protector; Perfect Mascara Full Definition; Shimmering Cream Eye Color and Shimmering Rouge; White Lucent Intensive Spot Targeting Serum+, Anti-Dark Circles Eye Cream and Brightening 1-2-3 Kit; Pureness Oil-Control 1-2-3 Kit; Eudermine Revitalizing Essence; The Skincare Moisturizing 1-2-3 Kit; Shiseido Men Essential Skincare Set.

Comments: Sales rose 1.7% last year and net income jumped 13.5% to nearly $184 million, for the year ended March 31, 2012. Domestic sales, which account for more than 50% of Shiseido’s total sales, fell 1.3%. To boost sales and perceived value, Shiseido cut the number of new product launches in half and focused on existing lines.

International sales rose 5.6%. Shiseido credited the increase to strong growth in Europe and North America, sustained high growth rates in Asia and a healthy performance by the professional business. The company credited the success, in part, to the addition of the Nars makeup brand and a good start to online sales in the US.

In June, the company announced three key changes to its organizational structure in the US that are designed to strengthen corporate support for its diverse family of innovative brands and provide an improved platform to accelerate their growth both in the US and globally. Specifically, the company announced that it will align the US finance, legal and human resources functions of its premier consumer brands, including Bare Escentuals, Beauté Prestige International USA, Nars and Shiseido, into a unified, shared services platform. The company will consolidate its US distribution operations for most of its brands at its distribution center in Columbus, OH, which will become the Shiseido Americas Distribution Center. Finally, Shiseido will merge its US manufacturing business, Shiseido America Inc. (SAI), into its Americas umbrella organization, Shiseido Americas Corporation (SAC).

“Together these changes create a seamless, world-class corporate, manufacturing and distribution platform in the US that will benefit all of our brands in the region,” said Carsten Fischer, chairman and CEO of Shiseido Americas Corporation.

Commenting specifically on the alignment of back office and administrative functions, which is effective immediately, Fischer continued, “We are committed to preserving each brand’s unique character and individual spirit, and we expect this shared services platform will better position each of the brands for future growth by providing world class support in the US. By combining the back office strengths of our various brands, each can become a stronger player in the US as well as globally, and the company can more efficiently and effectively serve its valued partners and customers.”

The company is streamlining its US distribution operations and expects to complete the facility consolidation by the end of the third quarter of 2013. The Columbus, OH center will expand its operations to handle shipment of products to the Americas and globally for multiple brands. A smaller distribution center to be established at Shiseido’s existing manufacturing facility in East Windsor, NJ will handle export of U.S-manufactured Shiseido brand products to Europe and Asia.

In connection with these organizational changes, the company made several personnel announcements. Pankaj Gupta, who has been serving as executive VP-finance and operations and CFO for Shiseido Americas Corporation since September 2011, will now also serve as regional CFO. Deanna Chechile, general counsel, Bare Escentuals, will now also serve as regional head of legal. Ginger DeLeo, has joined the company as regional head of human resources.

A Growth Plan
Shiseido is currently promoting its Three-Year Plan (April 2011 - March 2014) based on the theme of “getting into a growth trajectory” with the aim of becoming a “global player representing Asia with its origins in Japan.”


Shiseido created Upper Class Red lipcolor for Virgin Atlantic Airlines.
Shiseido overseas cosmetics sales currently encompass 89 countries and regions (including Japan) throughout the world. Overseas business accounted for 44.3% of Shiseido Group’s consolidated net sales in fiscal 2011.

This year, Shiseido said it will continue its efforts to enhance its presence in the prestige cosmetics market centering on the European market; strengthen and support its family of brands in the US market; ensure sustainable growth in Asian markets, including China; and expand points of contact with customers in the masstige market in Asia.

The company expects sales to climb 5.5% in the current fiscal year.


 

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