Japan
www.shiseido.co.jp
Sales: $6.35 billion

Sales:

$6.35 billion for the year ended March 31, 2008.

Key Personnel:

Shinzo Maeda, president and chief executive officer; Kimie Iwata, vice president, consumer information, corporate culture, public relations, corporate culture reform and committees; Yasuhiko Harad, chief financial officer; Toshimitsu Kobayashi, corporate senior executive officer, domestics cosmetics business, sales and president and representative, Shiseido Sales Co. Ltd.; Carsten Fischer, corporate executive officer, global business and chief officer of international business division and professional business operations division; Masaaki Komatsu, corporate executive officer, R&D, production and technical planning.

Major Products:

Skin care, color cosmetics, sun care, fragrances, hair care and toiletries. Major brands include Shiseido, Carita, Decleor, IPSA, Ettusais, D’icila Parfums Issey Miyake, Parfums Jean Paul Gaultier, Parfums Narciso Rodriguez, Nars, Cle de Peau Beaute Za, Parfums Serge Lutens, Urara and Supreme Aupres.

New Products:

Clé de Peau Beauté La Crèmes, Revital, Aqua Label skin care, Acne& skin lightening series, Uno men’s skin care, Tsubaki Golden Repair hair care, Urara Makeup, Shiseido BOP intensive skin collective program, Shiseido Zen fragrance (relaunch).

Comments:

For the year ended March 31, 2008, Shiseido’s consolidated net sales rose 4.2%. Domestic sales fell below the previous year’s total, reflecting a cooling of consumer sentiment in the second half of the year.  However, overseas sales were healthy, especially in China.
   
Sales in Shiseido’s domestic cosmetics business segment fell 1.9%.  Sales of prestige products, self-selection products and toiletries failed to reach their respective previous-year levels, leading to an overall decline in division sales, the company said.  During the year, Shiseido worked to create “broad and strong” lines by nurturing mature brands, but struggled in the face of cooling consumer sentiment and the onslaught of new products from competing companies.
   
In the professional division, which supplies and operates beauty salons, sales fell below the previous year’s level. During the year, Shiseido shifted to a sales style emphasizing quality of proposals in the merchandising area. However, the transitional state of those reforms couldn’t stop the slide, according to the company.     
   
In the health care division, sales increased year-on-year, marking a performance turnaround.
   
Sales in the overseas cosmetics business segment rose 17.6%, backed by steady sales increases in all regions, led by China. In China, Shiseido advanced its channel-specific brand strategy with a focus on Aupres, a dedicated brand for department stores, as well as Supreme Aupres, billed as an upper prestige line. In addition, the firm worked to expand the number of stores in the chain store channel and fostered growth of Urara, a brand designed for that channel.
   
In Asia, Europe and North America, Shiseido strengthened its marketing activities by zeroing in on strengths in anti-aging and skin-whitening products. During 2007, Shiseido enhanced its designer fragrances business and expanded shelf space in duty-free shops.
   
This past fiscal year marked the end of the company’s previous three-year plan to maximize growth potential and increase profitability.  
   
Shiseido is now embarking on its next long-term effort.  Over the next decade, the company will improve quality “across the board” from fiscal 2008 to fiscal 2010; get into a “growth trajectory” between fiscal 2011 and fiscal 2013, and make “a leap forward” from fiscal 2014 onward. How far of a leap? Within 10 years, Shiseido plans to “surpass net sales of one trillion yen, with more than half of sales being achieved overseas...”
   
Part of its new three-year plan will be to create a brand loved by customers throughout the world and establish an undisputed presence in Asia. In addition, the firm will continue to liquidate and withdraw from unprofitable businesses and brands for which no overall synergy or future growth can be expected.
   
Cost reductions will also be pursued by improving marketing efficiency. Five years ago, Shiseido’s spending was spread out over more than 100 lines in Japan. Over the past three years, the company has consolidated its portfolio, concentrating costs and human resources on 27 core brands/lines. Shiseido plans to further cull that number and concentrate marketing investment and manpower on 21, including six “mega-brands” and five so-called “relationship-building” brands.  
   
“The fewer products we have to sell, the more it improves our marketing efficiency. It also makes it easier to invest and easier to use our research resources,” CEO Shinzo Maeda said at a news conference.
   
Shiseido management is moving quickly on this next three-year plan. In June, Shiseido revealed that it would withdraw from fashion and accessories Plans include shuttering all but three of 21 Ginza stores by the end of the year. The remaining stores will sell cosmetics, according to Shiseido.
   
In addition, on July 1, Shiseido Co., Ltd. consolidated the business operations and assets of Shiseido Cosmetics (America) Ltd., Nars Cosmetics, Inc. and ZIC Corporation into Shiseido International Corporation, and changed the name of the company to Shiseido Americas Corporation (SAC).  Shuichi Tanaka, who was chairman and chief executive officer of Shiseido International Corp. is now chairman and chief executive officer of SAC. The efforts aligns well with Shiseido’s strategy of increasing the competitive strengths of the Shiseido Group and building a solid presence in the U.S.
   
SAC will shift each company’s functions to the newly created business units of Shiseido Cosmetics America, Nars Cosmetics of SAC and JV Fragrance and Skincare.  Back office functions will be consolidated, however, each business unit will be individually operated by the existing CEOs. Heidi Manheimer, former chief executive officer of Shiseido Cosmetics America Ltd., has taken the post of chief executive of Shiseido Cosmetics America of SAC.  Louis Desazars, president and chief executive officer of Nars Cosmetics, Inc. will become chief executive officer of Nars Cosmetics of SAC. Shuichi Tanaka, chairman and chief executive of ZIC Corporation will be chief executive officer of JV Fragrance and Skincare of SAC.