China helps Japan cosmetics maker Shiseido return to back
Japan's top cosmetics maker Shiseido has said burgeoning demand from
Chinese women for luxury beauty products helped it swing back into the
black in the year to March.
The company also benefited from the absence of costs incurred the
previous year because of early retirement packages and other
The cosmetic giant reported a net profit of 14.44 billion yen
(125.80 million dollars) for the full year to March, reversing a loss
of 8.86 billion yen made a year earlier and beating its own forecasts.
Operating profit rose 37.8 percent to 38.88 billion yen on revenue up 4.9 percent to 670.96 billion yen.
For the year to March 2007, Shiseido expects net profit to hit 23 billion yen on sales of 685 billion yen.
"The successful launch of two new mega-brand cosmetics, together
with aggressive marketing in the Chinese market, drove cosmetics
sales," Shiseido president Shinzo Maeda told a news conference.
Overseas sales were the key driver over the past year, jumping 12.3 percent while domestic sales edged up 2.1 percent.
"In China, sales rose some 36 percent in the past year and by
continuing to roll out strong brand cosmetics there, we are aiming for
more than 30 percent growth this fiscal year," Maeda added.
Shiseido, which has boosted research in China where women are buying
more cosmetics, plans to expand the number of shops there to 5,000 by
the end of 2008 from 1,000 at the end of 2005.
"As a result of the brisk sales in China, overseas sales will exceed
30 percent of our total sales this fiscal year ... a year earlier than
we had originally planned," Maeda said.
Shiseido has created cosmetic brands specifically for the Chinese
market under names such as Aupres and Pure Mild in hopes of luring
beauty-conscious Chinese women with deepening pockets thanks to an
economic boom in urban areas.
The toiletry division swung to an operating profit of 328 million
yen from a loss of 4.7 billion yen a year earlier as the company cut
unprofitable product lines and focused on shampoos, body soap and
As part of the restructuring reforms, Shiseido stopped selling its
toiletry products in South Korea over the past fiscal year and also
reviewed its marketing partners in Taiwan.
In the core cosmetics division, operating profit grew 14 percent to
43.7 billion yen, driven by brisk sales of its Maquillage make-up line,
Tsubaki shampoo and Uno, a male cosmetics brand.