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Shiseido Eyes Prestige Cosmetics to Drive Growth

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Shiseido, home to Nars, explained that small, unique brands have a distinct advantage over large established players

 

Makeup accounts for the largest share of the U.S. market for Shiseido, according to its most recent financial report, with the prestige makeup market expected to grow 13% by year's end. The company, home to Nars, explained that small, unique brands have a distinct advantage over large established players.

While bareMinerals has struggled, Nars is doing well, as is Laura Mercier, which posted year-over-year sales gains of 15% in the first nine months of 2016. Shiseido hopes that its makeup and digital center of excellence will help boost its prospects.

Shiseido, which continues to be focused on innovation, reported third quarter 2016 net sales of 210.4 billion yen, a 4.5% drop year-over-year. However, operating income rose 4.6% to 18.8 billion yen, while net income rose 33%, totaling 12.7 billion yen.

Travel retail net sales rose 55.7% during the period, while Japan, Asia Pacific and the Americas expanded by 4%, 7.1% and 6.1%, respectively.

Net sales for the first nine months of the year totaled 622.7 billion yen, a drop of 1.3%, year-over-year. However, operating income rose 17.1% to 631.0 billion yen, while net income rose 135% to 37.2 billion yen.

While Shiseido recently declared its ambitions to become a top-five fragrance company, the company experienced a net sales drop of 25% in the first nine months of the year. On the other hand, prestige, personal care and professional products grew 14%, 7% and 2%, respectively.

Travel retail net sales rose 55.7% during the period, while Japan, Asia Pacific and the Americas expanded by 4%, 7.1% and 6.1%, respectively. Europe, the Middle East and Asia fell 13.3%.

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