The company has been trying to boost its prestige cred internationally for over 20 years and the time has come to accelerate the long-term goal.
Shiseido’s affordable personal care business includes best-selling drugstore and pharmacy brands such as Senka skincare, Super Mild and Tsubaki haircare. The company has entered an agreement with CVC Capital to form a joint venture company, with the private equity firm owning a 65 per cent stake and Shiseido retaining a 35 per cent holding.
The US$1.5 billion deal gives Shiseido the space to concentrate on its prestige portfolio. Apart from its signature brand, the multinational owns or licenses Drunk Elephant, the fast-growing US brand it acquired in 2019 for US$845 million, Laura Mercier, NARS, bareMinerals and leading designer fragrance brands Dolce & Gabbana, Elie Saab, Issey Miyake, Narciso Rodriguez, Zadig & Voltaire, Serge Lutens and Tory Burch.
With the re-structure, Shiseido is aiming to become a global leader in prestige beauty over the next 10 years.
According to CEO Masahiko Uotani, for the first time since our foundation, we have achieved sales exceeding one trillion yen (US$9.47 billion) and 100 billion yen (US$948 million) in operating income with strategic focus on mid to high-priced cosmetics brands, which account for more than 70 per cent of group sales since 2015.
“I strongly believe that we must maintain this strategy and that it is the foundation for Shiseido and its nearly 150 years of heritage to thrive for the next 150 years.”
CVC Capital is very upbeat about its new investment. The products in Shiseido’s personal care division will continue to be made in Shiseido factories and the private equity firm believes the portfolio has strong potential for growth.
Using our global network and experience, CVC is committed to making these strong brands even better, said Yukinori Sugiyama, partner and co-head of CVC Japan.
“Specifically, we see significant potential for growth by investing further in employees, brands and R&D, as well as by driving digitalisation and accelerating overseas expansion, with the possibility of going public,” he added.