Sales: $12.0 billion
Masahiko Uotani, president and chief executive officer; Michael Coombs, chief financial officer; Kentaro Fujiwara, chief executive officer, Shiseido China; Marc Rey, chief executive officer, Shiseido Americas; Franck Marilly, chief executive officer, Shiseido Europe, Middle East and Africa; Philippe Lesne, chief executive officer, Shiseido travel retail
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
Fragrances: Dolce&Gabbana. Skin care: Optune IoT personalized skin care, Medicated Cate-Hybrid Foundation. Acquisition: Drunk Elephant
Comments: Driven by demand for prestige products, sales rose 3.4% to a record last year. Eight global brands helped drive that growth; excluding the impact of forex, sales of the Shiseido brand rose 18%, followed by Ípsa, 16%; Nars, 14%; Clé de Peau, Dolce & Gabbana, Elixir and Anessa, 9%; and Laura Mercier, 8%. Together, prestige beauty sales rose 10% and accounted for 46% of sales. Mid-and low-priced cosmetics rose 3% (30% of sales); followed by fragrance, up 9% (10% of sales); personal care, up 6% (9% of sales); and professional up 6%, (1% of sales).
By region, Japan sales fell less than 1% but the emphasis on the skin trinity; i.e., skin care, base makeup and sun care; helped stabilize results. Sales in China rose 13.3% propelled by prestige brands like Shiseido, Clé de Peau Beauté, Ipsa and Nars, as well as the made-in-Japan brands Elixir and Anessa. Asia Pacific sales rose 2.5%, helped by demand for Laura Mercier, Clé de Peau Beauté, Elixir, Anessa and Dolce & Gabbana. Sales fell 5.6% in the Americas as Shiseido continues working on Bare Minerals. While the region was a challenge, particularly in makeup, sales of Shiseido and Dolce & Gabbana continued to grow. Europe, Middle East & Africa sales rose 4.6%, due to Dolce & Gabbana and Narciso Rodriguez fragrances. Travel retail was a bright spot, too; sales rose 16.6% driven primarily by gains in South Korea, China, Thailand and other Asian countries.
A year ago, Shiseido agreed to develop, market and distribute Tory Burch beauty brands. Around the same time, Shiseido began an open innovation program, dubbed Fibona, which calls for collaboration with startups and consumers, launching beta versions with speed and creating a new research climate “that stimulates the passion and imagination of researchers who deliver innovation through the fusion of diverse knowledge and people in the beauty field.”
In November, Shiseido acquired Drunk Elephant, a prestige skin care line with a leading position in the “clean beauty” segment. Back in Japan, Shiseido dedicated the Nasu Factory in Ohtawara City to produce medium-to-high-priced skin care products. It was Shiseido’s first new Japanese factory in 36 years and will reportedly boost annual capacity by 120 million units.
Shiseido opened 2020 by dedicating its Beauty Innovation Hub in Shanghai. It’s the first hub outside Japan.
Mask acne is trending, and Shiseido researchers are learning more about how consumers interact with these ubiquitous cover-ups. In a survey of 520 women (aged 18-59), 90% of respondents were troubled by summer masks. More specifically, when asked: Do you have concerns about wearing a mask while you’re out during the hot summer months? The top response, not too surprisingly, was: feeling “hot” by 81.5% of respondents; followed by “stuffy under the mask” by 80.4% of respondents. Following these are makeup problems, with 64.0% worrying about makeup transfer and 51.2% about ruined makeup. Respondents were also more concerned about mask tans (42.1%) than acne and other skin problems.
Finally, in a nod to optimism in a time of global crisis, Shiseido unveiled its Global Campaign, “With One Another. Without Limits. Our Future Is Beautiful.”
Maybe, but the company still reported a 17% decline in Q1 2020 sales. President and CEO Masahiko Uotani said the 2020 goal is to defend the business and review medium-term strategy. By region, sales in Japan fell more than 21%, which was worse than results in China, where sales declined 12%. Shiseido noted that COVID-19 forced the closure of 70% of Chinese retailers from January to March, but by the end of March, over 90% had resumed operations. Sales in Asia-Pacific fell 19.2% and sales in the Americas dropped nearly 19%. New fragrance launches by Dolce & Gabbana lifted January sales in EMEA, but quarterly sales tumbled nearly 15%.
While much of the world wondered how airlines would survive during COVID-19, Shiseido’s travel retail business was surprisingly resilient. Sales fell just 3.1%, due in part, to the strength of Clé de Peau Beauté and Nars.
Finally, professional hair care sales fell 18.7%.