Sales: $9.9 billion.
Key Personnel: Masahiko Uotani, president and chief executive officer; Shigekazu Sugiyama, chief executive officer, Japan region and president, Shiseido Japan Co., Ltd.; Norio Tadakawa, chief supply network officer; Jean-Philippe Charrier, chief executive officer, Asia Pacific region and president, Shiseido Asia Pacific; Michael Coombs, chief financial officer; Kentaro Fujiwara, chief executive officer, China region and chairman and president, Shiseido China Co.; Katharina Höhne, senior vice president, global professional business; Kiyomi Horii, chief beauty strategy officer; Mitsuru Kameyama, chief information technology officer; Yoshiaki Okabe, chief brand officer; Yoshihiro Shiojima, chief quality officer; Yukari Suzuki, chief brand officer; Naomi Yamamoto, chief creative officer; Terufumi Yorita, chief legal officer; Katsunori Yoshida, chief product development officer.
Major Products: Skin care, color cosmetics, sun care, fragrances and toiletries. Prestige—Shiseido, Clé de Peau Beauté, BareMinerals, Buxom, Nars, IPSA, Laura Mercier, Benefique; Fragrances—Dolce & Gabbana, Issey Miyake and Narciso Rodriguez; Cosmetics—Elixir, Maquillage, Haku, Prior, Anessa, Aqualabel, Integrate, D Program, Aupres, Urara, Pure & Mild, Za; Personal Care—Senka, Tsubaki, Sea Breeze; Professional—Shiseido and Joico; Technology—MatchCo.
New Products: Shiseido—Benefiance wrinkle smoothing eye cream, ColorGel lip balm, Sports HydroBB compact, Ultimune Eye power infusing eye concentrate, Waso beauty sleeping mask; Nars—Mini Radiant creamy concealer, Narsissist Wanted mini eyeshadow; Clé de Peau—Wrinkle Smoothing Serum Supreme, Enhancing Eye Contour Cream Supreme; Narciso Rodriguez fragrance—Narciso Eau De Parfum Rouge.
Comments: It was a record year for Shiseido in 2018 as sales increased almost 9% to nearly ¥1.1 trillion. Operating profit surged nearly 35% to top ¥ 100 billion for the first time. The biggest increase came from prestige channels, where sales rose 16% last year. Prestige brands, such as Shiseido, Clé de Peau Beauté and Nars, accounted for 45% of sales. Fragrance sales rose 9% and accounted for 9% of sales; sales of cosmetics increased 12% and represented 31% of sales; personal care sales rose 12% to account for 9% of sales; and professional sales rose 4% and represented 2% of sales at year-end.
Japan accounted for nearly 42% of sales, but a 32% sales increase in China helped it move up to become the No. 2 market for the company, accounting for 17.4% of sales. The rest of sales breakdown looks like this: Americas, 12.0%; EMEA, 10.3%; Travel Retail, 8.0%; Asia-Pacific 6.2%; Other, 2.6%; and Professional, 1.9%.
By region, sales in Japan rose 9% in a country where the cosmetics market is expanding at a 1% rate, according to Shiseido, which continued to focus on skin care, base makeup and sunscreen. Top selling brands included Ultimune serum and Elixir lotions and moisturizers. Gains in China came from top brands like Shiseido, Clé de Peau Beauté Ipsa and Nars, as well as “Made in Japan” brands like Elixir and Anessa. Double-digit gains were reported in the all-important e-commerce category. Asia-Pacific sales increased almost 14%, due to significant gains in South Korea and Thailand. Sales in the Americas slipped 1.8% which the company blamed, in part, on the closure of unprofitable stores. Profits from Nars and Laura Mercier improved, and reforms at Bare Minerals continue. An investment in Dolce & Gabbana lifted Europe, Middle East and Africa sales by 4.3%, but the region still reported an operating loss of about $7.2 million. Finally, travel retail sales surged nearly 35%, due to solid growth in Asia of Shiseido, Clé de Peau Beauté, Nars and Anessa, according to the company.
In December, Melissa Sperau was promoted to president US. She reports to Marc Rey, president and chief executive officer, Shiseido Americas and chief growth officer, Shiseido Group. Prior to the appointment, Sperau was senior vice president, Americas at Nars Cosmetics.
The new year opened with a new system in place in China that’s designed to boost e-commerce results and ensure sustainable business growth. The team in China is composed of Kentaro Fujiwara, president and chief executive officer, China region, Shiseido China; Morgan Tan, senior vice president, prestige brands division of China region, president of Shiseido Hong Kong; Julie Chiang, chief marketing officer, cosmetics brands and personal care brands, China region; Anson Yu, chief financial officer, China region and Shiseido Hong Kong; Julia Li, chief people officer, China region; and Zaheer Nooruddin, senior vice president, DX (digital experience) division of China region.
Shiseido’s new global innovation center (GIC) in Yokohama is fully operational. Open since April, it acts as an innovation hub, creating unprecedented value through integrating various knowledge and expertise of leading-edge research facilities and other industries in and outside Japan, as well as communicating with diverse people including consumers, according to the company.
At a recent Cosmetic Executive Women event entitled “What Is Beauty?,” Shiseido CEO Masahiko Uotani explained that the company is evolving into a global player in the beauty industry, growing at a compound annual growth rate of 9%. The goal is to create a company where 70% of sales are outside of Japan. China is leading the international expansion, but investment is being made in the US and other parts of the world.
“A lot of our $1 billion investment went to marketing, communication, advertising and capital investment in brands, supplier capacities, R&D, IT, plants and people,” Uotani told the audience. “It’s not simply people, but investment in educational opportunities, learning centers, understanding different working styles in order to collaborate and communicate, so as a creative group we can really change a lot.”