Sales: $2.0 billion
Key Personnel: Satoshi Suzuki, president; Naoki Kume, director and vice president; Akira Fujii, director; Yoshikazu Yokote, director; Hisao Iwabuchi, corporate auditor; Kazuya Kugimaru, senior corporate officer; Takuma Kobayashi, senior corporate officer; Noriko Fukuyama, corporate officer; Ken Horikawa, corporate officer; Koji Ogawa, corporate officer.
Major Products: Skin care, cosmetics, personal care and fragrance. Brands include Pola, Orbis, Jurlique, H2O Plus, pdc, Future Labo, Decencia, Orlane and Three.
New Products: Pola Wrinkle Shot serum, V Resonatinc Cream, Three Three skin care, Decencia Saeru for sensitive skin.
Comments: Sales of beauty products jumped 12% last year, driven by a 24% increase at Pola, the company’s biggest brand. The other major brands weren’t so fortunate, as sales of Orbis fell 5%, Jurlique declined 2.6% and H2O Plus fell 9.6%. The company noted that operating income surged 47% on Pola’s sales increase and cost-of-goods-sold improvement.
Taking a closer look at the brands, Pola’s number of customers and purchase price per customer both grew significantly, and the overseas business turned a profit for the first time. Wrinkle Shot’s sales topped 940,000 units—30% more than the initial target. Pola calls it the first wrinkle-improving medicated cosmetics product in Japan.
Orbis’ sales fell due to a decline in repeat skin care product purchases, particularly among customers acquired in 2016. Jurlique struggled due to year-end weakness in Australia and in duty-free shops. Some good news, however, is that sales in China and Hong Kong recovered in the fourth quarter. Sales at H2O Plus were lower due to declining sales in Russia and North America. Sales of “brands under development” (i.e., Three, Decencia and Orlane), increased on the strength of Three and Decencia, according to the company.
For 2018, the company expects corporate sales to rise 3.5% and beauty care sales to increase 3.8%. To achieve its goal, Pola will introduce and develop “aging-care” and whitening products with high functionality that will follow Wrinkle Shot Serum. In addition, Pola will develop new store formats that focus on attracting customers and selling products, like the new Touch & Talk stations. Pola’s global strategy includes tripling the size of its store network to 90 by 2020. The goal at Orbis is more fundamental—eliminate weak sellers and improve overall quality and texture. Jurlique and H2O Plus Beauty are being restaged and Pola is determined to bring overseas operations back into the black.
For the first quarter, beauty sales rose 6.6%, driven by gains at Pola; however, Orbis and H2O Plus sales declined and Jurlique sales were flat.
In June, Pola started selling Wrinkle Shot Serum in Hong Kong and Taiwan, with plans to gradually expand to other countries and regions.