Shiseido (Japan)

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Shiseido is Japan's biggest cosmetics company, and one of the world's top five by revenues, now with operations in almost 120 countries. At an international level, the company is known for its range of exclusive makeup, skin-care and professional haircare products, and it operates fragrance licenses for Issey Miyake and other designers through French subsidiary BPI. Latest string to its bow is Dolce & Gabbana, whose license it acquired in 2016. Although Shiseido has a presence in most large Western markets, its main sphere of operations is in the Asia Pacific region, and China has quickly developed as its second largest global market after Japan. The company was plagued by uncertain direction in the late 1990s, and that led to a massive restructuring of the company's portfolio in which around 140 separate brands have been slimmed down to fewer than 30. The process has been complicated by intense competition in the domestic market from arch-rival Kao Corporation, now a bigger company overall though still smaller than Shiseido in the beauty sector. A new management team was appointed in 2014 to speed up transformation.

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Shiseido The Makeup L'Osier
Cle de Peau Beaute Jean-Paul Gaultier
Shiseido Zen Tsubaki
Shiseido The Skincare Eudermine
AG+ Shiseido Benefiance
Ipsa Haku
Aupres Zotos
Beauté Prestige Intl Za

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 24th Aug 2017: Ads of the Week: "All Things Beautiful". Japanese beauty giant Shiseido has rolled out a massive campaign to launch new skincare brand Waso across Asia. Here's a gorgeous sci-fi-inflected film from Wieden & Kennedy Tokyo - we were reminded of the opening credits sequence from the Westworld TV series - to highlight the range's philosophy of beauty inspired by nature. It's accompanied by an edgy press campaign depicting Millennial hipsters in striking wilderness locations around Japan. Lovely!

Adbrands Weekly Update 9th Jun 2016: Japanese giant Shiseido agreed to acquire US-based beauty and make-up range Laura Mercier and associated brand ReVive for an estimated $260m. Combined sales were $175m in 2015, according to Shiseido. The business is currently owned by Gurwitch Products, a unit of direct seller Amway. Make-up artist Laura Mercier is expected to retain her connection to her range.

Adbrands Weekly Update 13th Nov 2014: Carsten Fischer, the effective #2 and only Westerner on the senior management committee of Japanese beauty giant Shiseido, said he would leave the company at the end of his current contract in 2015. Despite being the longest-serving executive board member at Shiseido and overseeing the growth of its international business from 20% of sales to more than 50% last year, he has been passed over repeatedly for the top job. Shiseido has appointed three successive CEOs in the past three years, all of them Japanese.

Adbrands Weekly Update 1st May 2014: This is looking like the year Japanese exporters finally get back on track, largely as a result of the depreciation of the Japanese Yen against the US Dollar and Euro. Most of the credit goes to Prime Minister Shinzo Abe whose economic policies have reduced the average Yen/Dollar exchange rate for the past year to levels not seen since 2008, boosting the value of export sales considerably. Beauty giant Shiseido benefited from the weaker yen as a 26% jump in foreign revenues - generated almost entirely by exchange rates - offset sluggish performance in Japan, where sales were up by just 1%. Combined revenues rose by 12% to the equivalent of $7.6bn, while the prior year's net loss was eclipsed by a $260m profit.

Adbrands Weekly Update 27th Feb 2014: Following several months of exclusive negotiations, L'Oreal finalised a deal to acquire the Carita beauty salon in Paris, and its associated skincare brand, as well as French professional beauty brand Decleor from Shiseido of Japan. The price tag is €227.5m, or more than twice the two brands' combined sales of around €100m annually. They will join L'Oreal's professional beauty division.

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Free for all users | see full profile for current activities: Shiseido was founded in 1872 by Yushin Fukuhara, former head pharmacist for the Japanese navy. He took premises in Tokyo's bustling shopping district, Ginza, to open the country's first western-style pharmacy. The name Shiseido was derived from a Chinese expression meaning "all things come from Mother Earth". The company's first own-label product was Fukuhara Sanitary Toothpaste, launched in 1888. Not only was it an alternative to the tooth powders generally available, it was also one of the first toothpastes anywhere to contain fluoride. However the product which really set the basis for the development of Shiseido was cosmetic skin lotion Eudermine, first introduced in 1897. The business borrowed heavily from the American drugstore format, introducing Japan's first soda fountain in 1902, and introducing what was then a rare luxury commodity in the country, ice cream. It also defied traditional Japanese ideas of beauty, introducing the country's first skin-toned - instead of white - face powder. Among the flood of new products were cold creams, and the first domestically produced fragrances, introduced in 1918. Rapid expansion followed, and by 1923, the newly floated company was operating a chain of cosmetic retail outlets throughout Japan.

In 1927 the company was fully incorporated under the management of the founder's son, Shinzo Fukuhara, who had trained in America. He moved the focus of the business away from pharmaceuticals towards cosmetics, introducing the "Miss Shiseido" concept in 1934. These were among the world's first beauty consultants, a trained team of girls who delivered in-store demonstrations and advised clients on cosmetics. Three years later came the launch of the Camellia Club, designed to reward loyal customers. The club distributed a monthly fashion and beauty magazine to members who eventually numbered nine million, or one in six of all Japanese women.

World War II almost bankrupted the business, when it was forced to drop its cosmetic operation to manufacture medicines. But in the post-War years, the company launched a nail polish which re-established its focus. In 1957 Shiseido established local sales and production facilities in Taiwan, and began to export to Singapore and Hong Kong. Shiseido of Hawaii was established in 1962, and in 1964 the company introduced its first product designed specifically for the international market, Zen perfume. A year later Shiseido launched in America, initially as The House of Zen. Other international territories followed. Further subsidiaries were establishing during the 1980s; in 1986 the company acquired French beauty salon business Carita, followed by Zotos International, a leading US supplier of professional hair and salon products, in 1988.

To manage the company's growing line of fragrances, Beauté Prestige International was established in Paris in 1990, launching the highly successful l'Eau d'Issey Miyake and Jean Paul Gaultier perfumes. Les Salons du Palais Royal Shiseido, a showcase fragrance outlet was set up in 1992. The company then set its sights set on China, forming a joint venture in Beijing in 1997. It launched Aupres the same year, aimed exclusively at the Chinese market. Also in 1997, Shiseido bought the North American and Japanese professional haircare products divisions of Unilever's Helene Curtis beauty business, and followed this with American professional salon products company Lamaur in 1998. The group introduced a new cosmetics brand, Shiseido the Skincare, in 2000, and also agreed the purchase of nine haircare salon brands from Bristol-Myers Squibb, including DeAge hair colours, Waves and Salon Formula. Later that year it agreed a tie-up with Intimate Brands, owners of Victoria's Secret to develop joint cosmetic brands.

But as it attempted to build global sales, Shiseido had tended to overlook the domestic market, where its lead had begun to come under fierce pressure from imported, especially US, cosmetics brands. Many of Shiseido's main products in Japan had been available for several years and were perceived as old-fashioned by younger buyers. Also in 2001 the group was hit by a Y69bn accountancy change which resulted in a loss of Y45bn ($360m), the company's first since the end of World War II. Shiseido responded with a complete overhaul of its management team, and promised to concentrate on key products, eliminating almost half of its domestic brands. To build its salon business in the US, the group acquired California-based salon-use cosmetics maker Joico Laboratories at the end of 2001. The cost-cutting proved extremely successful, bolstered by strong performance in China. By mid 2002 the group was back on track. See full profile for current activities

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