Shiseido

brand-profile-thumb

Company Headquarters

1-6-2, Higashi-shimbashi, Minato-ku, Tokyo 105-8310, Japan

Driving Directions

Brand Description

Shiseido is one of the top cosmetics companies in the world, with a rich portfolio of international brands in 120 countries and regions.

Among others, Shiseido owns the following prominent cosmetics, skincare and fragrance brands: SHISEIDO, NARS, Clé de Peau Beauté, BENEFIQUE, ELIXIR, IPSA, MAQUILLAGE, INTEGRATE, AUPRES, ANESSA and ISSEY MIYAKE.

Our mission―BEAUTY INNOVATIONS FOR A BETTER WORLD―is to offer solutions to social problems and achieve a sustainable society, helping people find happiness through our mainstay beauty business. We strive to create a better world through beauty innovations, as we perceive and respond to each person’s profound need for betterment in an ever-changing global environment.

For more than 150 years our history and tradition have been built on distinctive innovations in each era. Today, we are taking on new challenges and making a concerted effort across the entire Group to pursue innovations that break the status quo and meet the diverse beauty values and needs of people around the world.

As a global beauty company of Japanese origin, we not only develop cosmetics, but introduce and create unprecedented products and new value that go beyond. Through these activities, we realize “beauty innovations” leading to new lifestyles for consumers around the world.

Key Personnel

NAME
JOB TITLE
  • Masahiko Uotani
    President and CEO
  • Norio Tadakawa
    CEO, Japan Region
  • Takayuki Yokota
    CFO
  • Kentaro Fujiwara
    CEO, China Region
  • Yoshiaki Okabe
    Chief Brand Officer, CTO
  • Hiromi Anno
    Chief Public Relations Officer
  • Maria Chiclana
    Chief Legal Officer, Global General Counsel
  • Mizuki Hashimoto
    Chief Brand Officer, Clé de Peau Beauté
  • Angelica Munson
    Chief Digital Officer
  • Koichi Noda
    Chief People Officer
  • Kenichi Saito
    Chief Supply Network Officer
  • Atsunori Takano
    Chief Information Technology Officer
  • Toshinobu Umetsu
    Chief Strategy Officer
  • Naomi Yamamoto
    Chief Creative Officer
  • Ryota Yukisada
    Chief Brand Officer, Shiseido

Yearly results

Sales: 6.9 Billion

Key Personnel: Masahiko Uotani, chairman and chief executive officer; Kentaro Fujiwara, president and chief executive officer; Yoshiaki Okabe, chief marketing and innovation officer; Norio Tadakawa, chief strategic business development officer; Ayako Hirofuji, chief financial officer; Toshinobu Umetsu, chief executive officer, China region; Maria Chiclana, chief legal officer and global general counsel; Mizuki Hashimoto, chief brand officer; Tomoko Ikeda, chief brand and product innovation officer; Yuko Kato, chief corporate governance officer; Angelica Munson, chief digital officer; Kenichi Saito, chief quality officer; Antonios Spiliotopoulos, chief supply network officer; So George Sugitomo, chief creative officer; Tomoko Tagami, chief corporate communication officer; Atsunori Takano, chief information technology officer; Yosuke Tojo, chief technology officer; Chiaki Tomita, chief brand officer; Shinji Wada, chief people officer

Major Products: Prestige—Baum, Benefique, Clé de Peau Beauté, Dr. Dennis Gross, Drunk Elephant, Effectim, Gallinée, Inoui, Ipsa, Issey Miyake, Nars, Narciso Rodriguez, Serge Lutens, Shiseido, The Ginza, Tory Burch, Ulé, Zadig&Voltaire; Premium—Anessa, Aqua Label, Aupres, D Program, Elixir, Haku, Integrate, Majolica Majorca, Maquillage, Prior, Revital, Sidekick, Urara; Inner Beauty—Inryu, Shiseido Beauty Wellness

New Products: Shiseido Revitalessence Skin Glow foundation, Elixir anti-aging cream; Narciso Rodriguez All of Me, Inner Beauty (new division)

Comments: Sales fell 8.8%. But sales in Japan, Shiseido’s largest market, accelerated every quarter and market share improved too. A sharp increase in profitability enabled the region to end the year in the black. Top-selling brands included Clé de Peau Beauté, Shiseido and Elixir, which rolled out an anti-aging cream to boost skin firmness.

Shiseido blamed a sales decline in China, in part, to a darkening consumer sentiment toward Japanese products after the release of treated water from the Fukushima nuclear plant into the Pacific Ocean. Sales fell 4% in China, but demand for Nars and Clé de Peau Beauté drove makeup gains. Travel retail results fell 19%, but Shiseido said a vigorous recovery was underway in Japan. Sales in Asia Pacific fell 1.1%, but Taiwan returned to growth, and South Korea and Southeast Asia delivered big gains on the strength of Nars and Shiseido brands. Sales in the Americas fell 20%, but Drunk Elephant posted gains, which the company credited to a strong social media campaign.

Last year, Shiseido launched SHIFT 2025 and Beyond, a three-year, medium-term strategy. SHIFT aims to increase investments in brands, innovation and people. The goal is to boost operating margin to 6% in 2024 and 9% in 2025. The long-term goal is to attain a core operating margin of 15% by 2029.

But for 2024, the company predicted an 11% increase in sales for Japan, a 13% gain in EMEA and Asia-Pacific and a 10% increase in the Americas. Shiseido is even bullish on travel retail (+7%) and China (+5%). In an effort to improve the bottom line, the company is determined to cut costs by ¥40 billion. Measures include SKU rationalization, a focus on global/Asian brands and strategic price increases.

In a note to investors, Shiseido brass boldly proclaimed the “worst is over, ready to recover in 2024.” And you know what? They may just be right! Q1 2024 sales rose 3.9%, despite elevated global economic uncertainty, rising prices and the sharp depreciation of the Japanese yen against major currencies. Moreover, China and Europe recorded slower economic growth, but the US economy continued to grow at a steady pace, and Japan’s economy remained on track for a modest recovery. Shiseido said the domestic cosmetics market remained solid, benefitting from an improved consumer sentiment driven by the wage growth, as well as a recovery in the number of foreign visitors to Japan which has exceeded its prepandemic levels, although price hikes continued to weigh on household spending. In the overseas cosmetics market, the trends and pace of growth were mixed across regions. While the duty-free retail market including Hainan Island continued to experience weakness owing primarily to retailer inventory adjustments amid tighter regulations, China’s cosmetics market continued to grow at a modest pace on the back of changing consumer behavior. The markets in the US and Europe also enjoyed healthy growth across all categories. By segment, Japan sales rose 19.3%; elsewhere, China (+ 4.2%), Asia Pacific (+11.2%), the Americas (+22.4%) and EMEA (+25.2%). However, travel retail sales fell 22.7%.

Sales: 8.2 Billion

Sales: $8.2 billion

Key Personnel: Masahiko Uotani, chairman and chief executive officer; Kentaro Fujiwara, president and chief operating officer; Yukari Suzuki, senior executive officer, chief D&I officer; Norio Tadakawa, chief executive officer, Japan region; Takayuki Yokota, chief financial officer; Yoshiaki Okabe, chief innovation officer and chief brand innovation officer; Maria Chiclana, chief legal officer and global general counsel; Mizuki Hashimoto, chief brand officer, Clé de Peau Beauté; Angelica Munson, chief digital officer; Kenichi Saito, chief quality officer; Antonios Spiliotopoulos, chief supply network officer; Tomoko Tagami, chief corporate communication officer; Atsunori Takano, chief information technology officer; Yosuke Tojo, chief technology officer; Toshinobu Umetsu, chief executive officer, China Region; Naomi
Yamamoto, chief creative officer

Major Products: Prestige—Shiseido, Clé de Peau, Nars, Ípsa, Drunk Elephant, The Ginza, Baum, Benefique, Effectim, Ulé; Premium—Elixir, Anessa, d Program, Haku, Maquiillage, Aqualabel, Prior, Revital, Aupres, Sidekick; Fragrance—Issey Miyake, Narciso Rodriguez, Serge Lutens, Tory Burch; Inner Beauty—The Collagen, Inryu; Life quality beauty brands

New Products: Nars Light Reflecting Foundation, Clé de Peau The Foundation

Comments: Sales rose nearly 6% last year. Top brands like Clé de Peau Beauté and Nars, along with fragrance, posted good gains. In contrast, most skin care brands struggled navigating headwinds in Japan and China.

Shiseido is in the middle of a restructuring plan that puts the focus on skin care. As a result, skin care now accounts for 70% of corporate sales. At the same time, Shiseido boosted profitability in the Americas and EMEA. Corporate-wide the goal is to reach a core operating margin of 15% by 2027. Shorter term, the goal is to reach 12% by 2025.

The company’s commitment to skin care is already paying benefits. Makeup brand Nars utilized Shiseido’s vast skin care knowledge to create Light Reflecting Foundation. It became the No. 1 best-selling product in the US prestige beauty market.

While everyone is making ESG commitments for 2030 and beyond, Shiseido goes farther. It is determined to become a “personal beauty wellness company” by the start of the new decade. At the same time, Shiseido put a medium-term plan in place called Shift 2025 and Beyond. The company is investing ¥100 billion (about $100 million) into marketing during the next three years.

The new year created new leadership at the top. Kentaro Fujiwara was appointed president and COO. Masahiko Uotani became chairman and CEO.

“The reasons for choosing Mr. Fujiwara as president and COO include his experience in the global management, particularly in the China business, his charisma, and his ability to make tough decisions as a leader,” explained Uotani.

“However, most importantly, having worked with him directly for eight years, I feel that he is a trustworthy and capable person to whom I can entrust the future of Shiseido.”

Uotani is scheduled to step down as CEO at the end of 2024.

For his part, Fujiwara said a bottom-up approach is paramount, as everything Shiseido does begins with delighting consumers.

“It is crucial for the people closest to them in each region and brand to show their creativity and enjoy their work proactively,” said Fujiwara, who said he experienced that first-hand when restructuring Shiseido’s Korea business.

By sales channel, prestige and premium accounted for 60% and 29% of sales, respectively. Fragrance represented 6% and Other, 5%. By region, China accounted for 24.2% of sales, followed by Japan, 22.3%; Travel retail, 15.3%; Americas, 12.9%; EMEA, 12.0%; Asia Pacific, 6.4%; Other, 6.0%; and Professional, 0.9%.

In March, Shiseido began offering cosmetic packaging made with Amcor’s LiquiForm technology, which is said to reduce plastic packaging and CO2 emissions by 70%.

For Q1 2023, sales rose 2.6%. Gains were led by Shiseido, Clé de Peau Beauté, Nars and Drunk Elephant. Shiseido said sales continue to recover in Japan and China while the Americas and EMEA remained strong.

Soon to open at its HQ in Ginza is Shiseido Future University. It will develop new leaders, according to the company.


Clé de Peau’s The Foundation

Sales: 9.1 Billion

Sales: $9.1 billion

Sales rose 12.4% last year. Sales in China rose 16.5%, making it Shiseido’s No. 2 market, right behind Japan. The Americas also posted good gains, with sales soaring nearly 33%. Elsewhere, sales were up 24.1% in EMEA and 22.3% in travel retail. Sales in professional channels rose 24.4%. In fact, only Shiseido’s home market of Japan suffered a decline in sales, falling nearly 9%. The company blamed the decline on shortened retail operating hours and fewer international travelers. Shiseido also gained market share in base makeup and sun care. Sales in China also took a hit due to covid, but e-commerce remained strong and accounted for 40% of sales in China. At the same time, consumers continued to gravitate toward prestige brands like Clé de Peau Beauté and Nars.

Sales in Asia-Pacific rose 9.9% on e-commerce gains and the popularity of Shiseido and Nars and the further rollout of Drunk Elephant. Results in the Americas got a boost from growing makeup sales, as masks came off and lipstick went on. Drunk Elephant was credited with opening new doors and Shiseido Clé de Peau Beauté and fragrance brands got a lift from promotions. Online video counseling and digital promotions expanded e-commerce sales in EMEA. At the same time, sales got a lift from the ongoing rollout of Drunk Elephant and Clé de Peau. Despite ongoing international travel restrictions, travel retail jumped on e-commerce demand and more beauty counters in Hainan Island, China, as well as the rollout of Drunk Elephant.

Last year, Shiseido launched WIN 2023 and Beyond, its medium-to-long-term strategy. From 2021 to 2023, the company is implementing “radical” transformations focused on profitability and cash flow, rather than growth via sales expansion. Some goals include 80% of sales from skin care (up from 60% in 2019), 15% operating margin and 100 billion yen in free cash flow. Looking further out, to 2030, Shiseido’s goal is to be “the world’s No. 1 company in skin beauty.” Financial targets include two trillion yen in net sales and operating profit margin of 18%. To get there, Shiseido transferred its personal care business to CVC Capital Partners. Under terms of the deal, Shiseido owns 35% in the JV. The move enables Shiseido to concentrate on prestige and premium cosmetics, as well as reduce cost of goods, increase ROI and secure cash to invest.

In January, 2022, Shiseido eliminated its current corporate officer system and shifted to a management system centering on executive officers. The executive officers will be responsible for roles in each business area required from the perspective of company-wide management of the Shiseido Group. Also in January, the company created Shiseido Creative Co., Ltd. to build lasting connections between consumers and brands at the global level.

In Q1 2022, sales slipped 1.3%. Strong sales in the Americas, EMEA and travel retail were offset by declines in Japan and China. There were winners and losers among brands as gains for Nars (+35%) and fragrance (+28%), were offset by a 9% decline for Shiseido and a 32% drop at Drunk Elephant.

Shiseido marked its 150th anniversary on June 1. The company proudly notes that Shiseido has won nearly as many IFSCC Awards (29) as the next five competitors combined (30).

 

Sales: 8.3 Billion

Sales: $8.3 billion

Sales fell 18.6% last year. By region, Japan accounted for 32.9% of sales, followed by China (25.6%); Travel Retail (10.7%), EMEA (10.3%), Americas (9.9%), Asia Pacific (6.4%), Other (2.8%) and Professional (1.4%).

Sales fell nearly 30% in Japan last year. Within the domestic cosmetics market, consumer traffic dropped as a result of temporary retail closures under a state of emergency, shortened operating hours following its lifting, and consumers staying at home. Other factors included restrictions on entry into Japan issued by the Japanese government, such as the cancellation of visas to citizens of approximately 150 countries and regions as well as reductions in international flights, all of which significantly decreased demand from inbound tourists.

International cosmetics sales fell sharply around the world through April 2020. A notable exception? China. Markets began recovering in March and Shiseido took advantage. Prestige brands such as Shiseido, Clé de Peau Beauté, Ipsa and Nars grew significantly and expanded their market shares on the back of new counter openings and strengthened investment in e-commerce. Sales from Singles’ Day (or “Double 11”), China’s largest e-commerce holiday promotion, more than doubled year on year. As a result, the ratio of e-commerce sales in China exceeded 40%.

Sales in Asia-Pacific fell 15.3% due to the pandemic’s impact in key markets such as South Korea and Thailand. Still, Shiseido expanded its made-in-Japan brands and increased counters in South Asia. In addition, e-commerce sales grew significantly, driven by Shiseido and Senka thanks to strengthened collaboration with major e-commerce platforms in various regions.

Sales in the Americas fell 25.7% as the pandemic forced retail closures throughout the region. Shiseido also noted that dozens of US retailers filed for bankruptcy, including JC Penney and Neiman Marcus. A bright spot? Drunken Elephant’s online sales. Shiseido acquired the brand in 2019.

EMEA sales fell 20.4%. With lockdowns and curfews in place early in the year and in the fall, consumers turned to e-commerce and Shiseido skin care performed very well. Launches of Clé de Peau Beauté in Italy and Spain, and of Drunk Elephant in Germany, also contributed to sales.

Travel retail sales fell 19.8% due, of course, to travel restrictions. Yet, consumer purchases in Asia grew year on year, as the number of domestic tourists to Hainan Island in China and demand at South Korean downtown duty-free stores and in e-commerce remained high. Also providing a sales lift was new counter openings, mainly for Ipsa and Elixir.

But no segment was harder hit by stay-at-home orders than the Professional business. Sales fell 13.1% on the year. China, however, reported an increase in sales due to strengthening in the online channel.

Q1 2021 sales rose 7.5%, but the company noted that the global economic conditions remained challenging, as economic activity stagnated due to the pandemic. Consumer sentiment declined due to worsening corporate earnings and employment.

Sales: 12 Billion

Sales: $12.0 billion

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%.

 

Sales: 9.9 Billion

Sales: $9.9 billion.

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.”

 

Sales: 8.9 Billion

Sales: $8.9 billion

Sales rose in every market topping one trillion yen and operating income more than doubled. By category, prestige brands such as Shiseido, Cié de Peau Beauté and Nars, accounted for 42% of sales. Cosmetics (Elixir, Haku and Prior) were next at 30%. Fragrances, like Dolce & Gabbana and Issey Miyake, represented 11% of sales; and personal care (shampoos, body care) was 9%. Finally, professional products were 5% of sales. By business segment, Japan represented 42.9% of sales; followed by China (14.3%), Americas (14.0%), EMEA (12.8%), Asia Pacific (5.4%), travel retail (4.4%), professional (4.3%) and other (1.4%). Last October, Shiseido sold Zotos to Henkel.

Like many other players in the International Top 30, Shiseido puts its plans for the future in writing. To speed up sales growth, the company is accelerating digitalization and developing new businesses, and generating new value through innovation.

The new 3-year plan, Vision 2020, calls for sales topping ¥1.2 trillion (CAGR 8%), with operating income over ¥120 billion and return on investment of 14% or higher. Plans for Japan include domestic and international agendas. For Japan, it means focusing on three skin-related core brands; expanding and enhancing contact points; and attracting the young and the second baby-boomer generation. Inbound strategies include: cross-border marketing; multiple touch points; multilingual support at stores; an increase of 10% or more vs. the previous year.

In China, the plan calls for accelerating the growth of the prestige business, expanding into tier 3 and tier 4 cities and reinforcing e-commerce. The end game is to boost sales 4% or more (like for like) year-after-year. For the cosmetics business, 2020 means reinforcing Aupres’ sustainable growth; improving profitability of Za and Pure&Mild; and expanding brand awareness for Elixir and Anessa.

In the Americas, Vision 2020 means lifting digital sales; aggressive growth of makeup brands; strict control cost and resource allocation to deliver better profitability; and adapting the team in size, skill and agility to embrace the future. The goal should boost CAGR 2%, according to Shiseido.

EMEA’s Vision 2020 plan is to expand fragrance growth; reinforce Shiseido brand equity in skin care; enhance the company’s presence in makeup; and optimize integrated organizations for a CAGR +9%. Plans in Asia call for expanding contact points with consumers through omni-channel acceleration, establishing a cosmetics/personal care brand portfolio, and accelerating e-commerce growth. As in EMEA, the goal is to create a CAGR of +9%.

Finally, through 2020, Shiseido aims to become a top 4 player in the travel retail business, making the moves necessary to boost compound annual growth of 20%. To get there, Shiseido will drive multi-brand growth with the addition of IPSA, Laura Mercier and other brands; advance travel-centric, innovative marketing; and expand sales through retail excellence capabilities.

Looking even further ahead, Shiseido’s goal is to become a top 3 player in the global prestige cosmetics market by 2030, with net sales of more than ¥2 trillion and operating income over ¥300 billion.

These efforts come as economic conditions in Japan continued to slowly improve and consumer spending was up on improvements in employment, according to Shiseido. The domestic cosmetics market was bolstered by the underlying recovery trend as well as increased demand from the growing number of overseas visitors to Japan. In international cosmetics markets, overall growth in Europe was slow, as the growth conditions vary from country to country. The Americas experienced slow expansion, while China and other Asian markets continued to record steady growth.

In January, 2018, Shiseido resumed its acquisitions, purchasing the Second Skin technology of Olivo Laboratories, LLC. Olivo’s patented technology creates a flexible artificial skin which delivers immediate skin rejuvenation results.

In the first quarter, sales increased 12.8%. The prestige category achieved significant global growth, and Shiseido said it actively engaged in cross-border marketing aimed mainly at Chinese consumers throughout Asia. Sales were up in nearly every region: Japan (+17%), China (+124.8%), Asia-Pacific (+16.1%), EMEA (+11.7%) and travel retail (44.3%). The Americas posted a decline, falling 1.1% and sales in the professional segment tumbled 55.4%. For 2018, Shiseido expects sales to rise 2.8%, operating income to jump 11.9% and net income to soar 137.4%.

 

Sales: 7.8 Billion

Sales: $7.8 billion

For more than 100 years, Shiseido has been the dominant player in the Japanese beauty market. In the past decade, the company has moved aggressively into other parts of Asia and now it is expanding rapidly in other parts of the world via product launches and acquisitions. In fact, its products can be found in about 120 countries around the world. Company executives are determined to reach ¥1 trillion in sales by 2020 (sales reached ¥855 billion last year) with over ¥100 billion in operating income.

To get there, Shiseido shook up its Japan-centric structure by moving toward a matrix organization with Centers of Excellence to create new value. Japan hosts the Center of Excellence for skin care, the Americas for makeup and digital marketing, and Europe for fragrance.

By region, Japan still accounts for 48% of sales, followed by the Americas (19.1%), China (14.2%), EMEA (10%), Asia Pacific (5.8%) and travel retail (2.9%). By category, prestige sales accounted for 39.9% of sales last year, followed by cosmetics (31%), personal care (9.4%), fragrance (7.9%) and professional (5.5%). Prestige product sales rose 15% to account for 39.9% of sales last year. Cosmetic sales increase 1% to 31% of sales. Fragrance sales fell 15%.

It seems to be working. In Q1 2017, sales rose 9% to more than ¥232 billion ($2.05 billion at current exchange rates).

 

Sales: 6.3 Billion

Sales: $6.3 billion

Shiseido is finally turning things around—both around the world and in its critical home market. Domestic sales increased nearly 12% and international sales increased 5.4% (local currency) and 13.3% (yen). Sales rose in every market, according to company executives. In fact, CFO Norio Tadakawa pointed out it was Shiseido’s first year of growth since the financial crisis of 2008.

Sales in Japan rose 10.9%. Sales rose sharply in the prestige sector, with Shiseido increasing 43% and Clé de Peau Beauté sales up 36%. Core, mid-priced brands such as Elixir and Maquillage had good gains, but value-priced cosmetics struggled in Shiseido’s home market. This year, the company expects Japanese sales to grow 3%.

International sales rose 5.1% on local currency terms, but the weak yen boosted the gain to nearly 13%. Cosmetics sales in China continue to grow at a high single-digit pace, though the deceleration of the economy is cause for concern. Good news came from Singapore, Malaysia, Vietnam and travel retail, where sales were solid in 2015.

In the Americas, bareMinerals’ sales were flat, but gains were recorded for Shiseido sun and skin care products and Nars cosmetics. Shiseido admitted that its brands struggled in Germany, Switzerland and other parts of Europe, but there were some bright spots, specifically the sales gains registered by the prestige fragrances.

Last year, the company moved to a January-December fiscal year. Results are for the nine months from April 1, 2015 to Dec. 31, 2015 for Shiseido and its consolidated subsidiaries in Japan and the 12 months from Jan. 1, 2015 to Dec. 31, 2015 for all other subsidiaries.

Now Shiseido is embarking on a new plan, Vision 2020, which calls for net sales of more than one trillion yen, operating income over 100 billion yen and return on equity of at least 12%. The goal, say company executives, is to become a company that is supported and needed by consumers worldwide. To get there, Shiseido must become more consumer-oriented, nurturing strong brands built on research and development, people and organization, and marketing.

For the first quarter of 2016, sales rose 1.4% to a record ¥213.3 billion. Sales of prestige products led the way with a gain of more than 10%. Cosmetic sales increased 1.4% and professional sales rose less than 1%. Meanwhile personal care sales were flat and fragrance sales declined 5.4%. Forex effects reduced sales 6.7%.

Most regions posted gains in Q1. Sales in Japan rose 4.5% and China gained 4.2%. Elsewhere, Asia-Pacific grew 1.2% and the Americas added nearly 1%. Only Europe, Middle East and Africa reported a decline in sales (3.2%). Travel retail sales rose 2.1%.

Shiseido continues to make more to shore up its presence outside Japan. In May, the company dedicated a new research facility in Windsor, NJ. Research will focus on color cosmetics. It joins the Japan Innovation Center focusing on skin and the European Innovation Center focusing on fragrance.

“With the opening of this Innovation Center, we are firmly in the most dynamic, exciting market in the world,” explained Masahiko Uotani, president and group CEO, Shiseido Co. Ltd. at the opening earlier this year. “My dream is that the Americas Innovation Center develops innovative products that make the consumer say, ‘Wow! I never thought of that!’ Just like the reaction that Sony got when it launched the Walkman.”

The oohs, ahs and wows continued in June when Shiseido acquired Gurwitch from Alticor. The deal adds the Laura Mercier and RéVive brands to Shiseido’s prestige portfolio. No purchase price was disclosed, but Gurwitch had sales of $175 million last year.

Last month, Jill Scalamandre joined Shiseido as the president of the global makeup center of excellence. She will report to Marc Rey, president and CEO, Shiseido Americas. Prior to joining Shiseido, Scalamandre served as chief marketing officer, skin care, Coty and senior vice president, Philosophy.

For the full year, Shiseido expects its global sales to rise 3% on a local currency basis. Looking even farther ahead, a global innovation center should be completed in Yokohama in 2018.

 

Sales: 6.4 Billion

Sales: $6.4 billion

Is Shiseido’s house finally in order? The company’s been long known for effective products in beautiful packaging, but for the last several years, that kind of quality didn’t translate into higher sales. But a turnaround may be underway. Sales rose 2% for the year ended March 31, 2015. Japan accounted for 47% of sales, followed by Asia/Oceania (21.9%), Americas (17.1%) and Europe (14%).

After years of getting hammered by poor conditions in its home market of Japan and being a late entry into emerging markets like China, CEO Masahiko Uotani told investors that Shiseido is changing. First, company executives now know the front lines of the business and understand essential management issues. An important part of that program is the ICHIGAN Project, which involves all employees and includes events in an effort to creating attractive selling spaces across Japan. Outside its home market, Shiseido is in the process of reengineering its China business, and is determined to empower a diverse range of employees throughout the organization. The plan seems to be working, as Shiseido is expanding market share and adding new customers in Japan. Internally, company executives say they are focused on capital cost conscious management and are making structural reforms to address core issues.

These moves are expected to lift sales over ¥900 billion by 2017 and over  ¥1 trillion by 2020—all part of its Vision 2020 plan and, not so ironically, the same year that Japan with host the Olympic Games.

To reach the 2017 sales goal, Shiseido is clearly focused on China, where sales actually fell 2% during the previous three years. But by 2017, the company expects sales to grow 9%. In fact, Shiseido executives expect sales growth to improve throughout the world during the next three years. Europe’s CAGR will rise from 1 to 2%, Asia (excluding China) will rise from 3 to 7%, Japan will grow from 1% to 3%, and the Americas will grow from 4% to 6% by 2017.

To help expand its professional business in Asia, last month Shiseido formed a joint venture with the Aura Beaute Group, its current distributor for the Shiseido Professional brand in Indonesia. Shiseido now owns 65% of the JV.

From 2017 to 2020, Shiseido is aiming for a CAGR of 5-7%, driven by new brands, M&A activity and penetration into emerging countries and “unexplored areas.” At the same time, the company will boost R&D spending from 1.8% to 2.5% of sales and increase R&D personnel from 1,000 to 1,500. As part of its “Think Global. Act Local” strategy, Shiseido will set up a global innovation center in Japan and expand its research centers in the US, Europe, Southeast Asia and China.

 

Sales: 7.4 Billion

Sales: $7.4 billion

Sales rose more than 12% for the year ended March 31, 2014. Domestic sales increased 1.1%, while international sales surged 26.4%. The increase was attributed to a marginal gain in higher net sales and favorable exchange rates. Domestic sales represented 51% of total sales. Shiseido continues to focus on core brands and two mid-priced lines, Elixir skin care and makeup and Maquillage makeup led gains. To attract older consumers, Shiseido created a dedicated website for seniors that offers “next generation” beauty solutions. At the same time, the company set up a toll-free information line for seniors and began publishing Kirameki Ms. Tsushin, a dedicated tabloid.

Within its health care business, Shiseido focused on The Collagen, its line of beauty foods, and rolled out Tsuyatsuya Purun Jelly within the Kirei No Susume line of beauty drinks.

International sales jumped, thanks to big gains in the US via the Shiseido and Nars brands. Sales also got a lift once Shiseido began handling the Ferragamo and Burberry fragrance brands. Results in China where hurt by the Senkaku Islands dispute and sales there declined slightly. Outside China, sales rose in other Japanese markets.

In February, Shiseido agreed to sell its Carita and Decléor brands to L’Oréal. Together, the brands had sales of nearly $140 million. Carita is available in 56 countries and Decléor is available in 80 countries.

On April 1, Masahiko Uotani became president and chief executive officer, replacing Shinzo Maeda, who retired.

Also in April, Shiseido opened a research facility dedicated to hair regeneration at the Kobe Biomedical Innovation Cluster in Kobe, Japan. The move came after Shiseido acquired the rights from RepliCel Life Sciences to use RepliCel Hair-01 (RCH-01) technology throughout Asia. RCH-01 is described as an autologous cell transplantation technology, in which specific cells isolated from the hair follicles taken from the scalp of a patient are cultured and injected into the bald scalp area, potentially stimulating residing hair follicles and promoting new growth in the balding area.

Also in April, Shiseido expanded its operations in Indonesia with 65% ownership of PT Shiseido Cosmetics Indonesia. Sinar Mas Group owns the rest of the JV. The company notes that Indonesia has the world’s fourth largest population (about 250 million) of which 60% is below 35 years of age.

In June, Shiseido signed a licensing agreement to develop fragrances under the Zadig & Voltaire French ready-to-wear fashion label.

Looking ahead to the new fiscal year, the company expects domestic sales to decline nearly 2%, while international sales are expected to increase 6.6%. Shiseido derives more than half of its sales from outside Japan.

 

Sales: 7.1 Billion

Sales: $7.1 billion

Sales fell less than 1% in local currency due to a 1.8% decline in Japan that was partially offset by an 0.7% increase in international sales. Despite that, Shiseido executives noted that the business climate had worsened in China after anti-Japanese sentiment broke out in mid-September.

Although Bare Escentuals maintained growth and profitability since it was acquired in March 2010, CEO Shinzo Maeda said sales have remained lower than expected primarily due to weakness in North America and the decision to not enter China due to regulatory issues.

By region, sales in Japan fell 6.7% and European sales dropped 3.1%. In contrast, sales in the Americas increased 2.5%, rose 2.7% in Asia/Oceania and increased 1.6% in China, despite a difficult climate in the second half of the year.

To get growing again, Shiseido is making “substantial changes” without changing its medium- to long-term goal of becoming a global player representing Asia with its origins in Japan. These changes include rebuilding business in three key countries—Japan, where struggling retail sales are beginning to recover; China, where the situation has been very difficult for Japanese companies of late; and the  US, where Shiseido is increasing its investment in Bare Escentuals.

To boost business in its home market, Shiseido is developing a new vision for cosmetic specialty stores, which enhances beauty consultants’ activities. At the same time, Shiseido is increasing support for Elixir Maquillage its mid-priced products. To improve consumer loyalty, Shiseido introduced Beauty & Co and watashi+, each of which encouraged more than one million consumers to register as members. Finally, corporate executives and the sales staff are working together to reduce product lines and distribution channels in an effort to focus activities.

To improve business in China, Shiseido is reducing the number of brands it offers in the country, but will increase its investment in what remain on shelves. The first brands to get more attention are Aupres and Urara, which will be promoted in 217 cities with populations in excess of one million. But even as it works to boost sales in China, Shiseido is looking elsewhere for growth including Russia, Brazil, Indonesia and India.

In India, initial efforts will target the “upper masstige” bracket with the skin care and makeup brand Za (pronounced zee-ei), which is currently offered in 12 markets in the Asia/Oceania region. The line is expected to bow in April 2014 with plans to be offered in 250 doors by the end of 2014, 650 doors in 2015, and expansion plans in place to reach over 1,700 doors by 2018. The global Shiseido brand has been present in the market since 2001 through a local distributor focusing on the prestige segment and will remain under the stewardship of the company. Prior to this latest announcement, Shiseido had focused marketing efforts toward India’s prestige segment. In 2001, it launched the global Shiseido brand in India through local distributor Baccarose Perfumes & Beauty Products Pvt. Ltd. Currently available at approximately 30 high-end department stores, the brand has recorded steady sales performance. In 2002, Shiseido launched Issey Miyake and other designer fragrances produced by its wholly-owned French subsidiary Beauté Prestige International (hereafter BPI) via Baccarose. The fragrances are currently available at some 120 stores across India.

According to a study carried out by Shiseido in 2011, the masstige market is eight times larger than the prestige market in which Shiseido currently operates. Therefore, to strategically expand its presence and better serve the profile of the local market, Shiseido established a representative office in Mumbai in 2011, carrying out marketing surveys and research into consumer habits and preferences.

Shiseido aims to become “a global player representing Asia, with its origins in Japan.” The ratio of its overseas sales has reached 44.9% in the most recently concluded fiscal year, bringing the near-term goal of 50% within reach. With the establishment of the Indian subsidiary, Shiseido has commenced direct investment in each of the BRIC (Brazil, Russia, India and China) markets. To pursue its steady growth strategy, the company intends to maintain its active investment not only in established markets but also in emerging markets as well.

 

Sales: 8.6 Billion

Sales: $8.6 billion

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.

Sales: 7.5 Billion

Sales: $7.5 billion

Sales fell 2.7% last year due to continued sluggishness in Japan, which accounted for more than 63% of sales.Sales in Japan declined 5.8%.

But the big news last year was the $1.8 billion acquisition of Bare Escentuals, which represents Shiseido’s latest effort to build a bigger consumer base in the US. Bare Escentuals gets about 88% of its sales from the US. Aided, in part, by Bare Escentuals, Shiseido’s sales in the Americas surged nearly 81%. Sales rose 6% in Europe and 5.9% in Asia/Oceania. During the year, the company entered nine new countries, including South Africa and Mongolia.

As it looks beyond its borders, Shiseido will have a new leader at the helm. In January, the board elected Hisayuki Suekawa as Shiseido’s 14th president and chief executive officer. He succeeded Shinzo Maeda, who was named chairman. Prior to this appointment, Suekawa was corporate officer and general manager of corporate planning. The new president’s goal is to boost international sales to 50% of corporate sales by 2017—that’s up from 42% in the most recently concluded fiscal year. The focus beyond its home market comes at a time when demand in Japan remains anemic and wages sluggish. In particular, Suekawa has his sights set on China, where he will try to increase sales at least 15% a year for the foreseeable future. Last year, Shiseido launched the DQ mass-market skin brand in China, where the economy is growing 10.3%. China accounts for about 10% of Shiseido’s sales.

In March, Patrice Bellard was selected as president of Beaute Prestige International, Shiseido’s designer fragrance division.

Following the earthquake and tsunami disaster in Japan, Suekawa toured the area and said despite the devastation, cosmetics remained essential items in women’s day-to-day lives. To help keep spirits up, Shiseido volunteers flocked to emergency shelters with cosmetics and other beauty activities.

Looking ahead, the company expects sales to rise 1.4% to 680 billion yen. In Japan, sales are expected to be flat, but elsewhere, sales are expected to rise 10% in local currency terms. To keep sales growing, the company is focused on three major brands: Shiseido, Bare Escentuals and Cle de Peau Beaute, a recently revamped line that company executives say will appeal to wealthy consumers in North America.

 

Sales: 6.8 Billion

Sales: $6.8 billion

Corporate sales fell 6.7% last year. Domestic cosmetic sales represented 61.7% of group sales, while international sales accounted for 36.7% of sales. More specifically, the Americas represented 7.5% of sales; Europe, 11.5% and Asia/Oceania, 17.9%.

In an effort to contain costs, Shiseido combined lines and channels, focusing on specific targets in Japan. In some ways, the rationalization paid off, as sales at “priority voluntary” chain stores and department stores remained strong. However, results at drugstores and general merchandise stores slipped.

Outside Japan, sales rose 3% as sales in Europe and North America began to rebound in the fourth quarter. In Asia, sales were up on continuing strength in China.

Tough Times Ahead?
Things may get worse before they get better. In a presentation to analysts in April, chief executive officer Shinzo Maeda noted that domestic over-the-counter cosmetic sales fell 3-4% in 2009 and warned that there was no sign of an upturn.

“We expect that the market will continue to experience negative growth in the first half of fiscal 2010, but will bottom out in the second half,” he told the audience. “For the full year, we expect sales to be down around 1%.”


Shiseido’s limited edition eyeshadow is new for Fall 2010.

The prediction follows three difficult years in the Japanese cosmetics market. In addition to the aforementioned decline in 2009, sales were flat to down 1% in 2007 and off 2-3% in 2008, according to Shiseido.

Outside Japan, Maeda noted that Europe and the U.S. remained weak after the Lehman crisis, but appeared to be recovering slowly, at different speeds in different regions, from the fourth quarter of fiscal 2009.

“Although the outlook for fiscal 2010 remains uncertain, we expect that the recovery will continue,” explained Maeda.

Meanwhile, in Asia, including China, although the markets were affected by the global economic downturn in the first half of fiscal 2009, the impact was less significant than in Europe and Americas. Maeda noted that the markets have gradually been recovering previous growth since the second half, and he expects this trend to continue in fiscal 2010.

Taking a long-term, global look at the cosmetics market, Shiseido predicts that the Western European cosmetics market will grow just 0.1% a year from 2008 to 2013 to reach $72.5 billion. North America will increase 1.7% to $45.5 billion. Eastern Europe will grow 2.9% to reach $23.0 billion. The Middle East-Africa region will grow 4.7% to $12.4 billion and Central and Latin America will grow 2.9% to $5.8 billion. To boost results outside Japan, in March, Shiseido completed its $1.7 billion acquisition of Bare Escentuals. The brand is attracting new department store customers in Japan and Shiseido hopes to recreate the brand’s successful home shopping model outside the U.S.

With an eye toward maintaining double-digit gains in China, Shiseido is entering new categories to target new customers and channels with the introduction of such hair care brands as Joico and Shiseido Professional. The company expects the two brands to reach 700 salons in Shanghai and Beijing by the end of 2010, and 2,500 hair salons by 2014.

Last year, Shiseido entered Egypt, Morocco, Laos and Azerbaijan. This year, the company will enter Mongolia and plans to develop “new markets in a few more countries” by next year, according to Maeda. Right now, Shiseido has operations in 74 countries.

The overall goal, as it has been for years, is to turn Shiseido into a global brand that represents Asia with its origin in Japan, according to company executives.

Sales: 6.9 Billion

Sales: $6.9 billion

Shiseido’s results for fiscal 2008 were sluggish, as both net sales ($6.9 billion) and profits slid for the year ended March 31, 2009.

Domestic cosmetics, which accounted for 59.7% of company revenues, declined 6.9%. Most products performed poorly, according to the company, save Haku Ex brightening beauty essence. In particular, the company said “counseling” cosmetics in the medium price range and lower-priced self-selection cosmetics struggled.

So how does the company plan to turn things around? This year the company wants to boost sales of its so-called power shops—chain stores that have voluntarily strengthened ties with the cosmetics firm. In particular, Shiseido will implement exclusive power shop initiatives for Benefique as well as create special advertisements for individual stores. The company plans to increase the number of power shops from 600 to 2,000 within three years.

In department stores and structured retailers, Shiseido will zero in on Revital Granas. Although there was growth in sales of the beauty essence, which is the mainstay of the line, the basic items have yet to catch on. The company remains confident in the usability of the items and will continue to cultivate them.

In drugstores, especially major chains, Shiseido will focus on hair care, skin care, and men’s products. In addition, the company has plans to relaunch its Aqua Label and unveil a line called Uno.

To make Shiseido a more competitive global player, the company plans to remodel counters and roll out Solution LX, a premium line of day and night face creams.In addition, the company plans to focus marketing activities on cities that have so-called “strong ripple effect” potential. For fiscal 2009, Shiseido was eyeing 25 major metropolises in Europe, the U.S. and Asia that fit this description.

This spring, Shiseido became the first company in the cosmetics industry to be certified under the Japanese Ministry of the Environment’s “Eco-First Company.” The Eco-First Program was created by the Ministry of the Environment in April 2008 to “encourage leading companies in each industry to redouble their environmental protection activities by having them make a commitment to the Minister for the Environment concerning their environmental protection initiatives such as global warming countermeasures geared toward compliance with targets mandated by the Kyoto Protocol.” Certified companies are permitted to use the Eco-First mark in publications and advertising.

Sales: 6.4 Billion

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

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.

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