Japanese cosmetics giant Shiseido Co. Ltd. said Tuesday it has agreed to sell its Zirh men's skin care brand to a group of investors led by former Zirh president and owner Brian Robinson.
While terms of the deal were not disclosed, industry sources estimated the purchase price could reach between $25 million and $50 million. Sources estimate the Zirh brand does $25 million in retail sales annually worldwide.
It's a homecoming of sorts for Zirh. Robinson, who was president of the brand before leaving the company in 2004, originally purchased Zirh in 1998 after working as a management consultant for the brand.
Shiseido first invested in Zirh in May 2000, when it bought 58.3 percent of the brand. In 2003, Shiseido upped its stake in Zirh to more than 79 percent and the Zirh business launched French Connection U.K.'s fragrance business under license.
A year later, Zirh became a wholly owned subsidiary of Shiseido, within a division called Zirh International Corp. Also in 2004, John Varvatos' fragrance business was launched under license within Zirh International Corp., a venture that was largely spearheaded by Robinson.
Following the sale of Zirh by Shiseido, which was closed on Monday, Robinson's firm, called Zirh Holdings LLC, will have control of the Zirh brand as well as Corduroy, a fragrance business under the Zirh umbrella.
Shiseido retains control of the Varvatos fragrance business within a newly named division called ZIC Corp. The FCUK fragrance license ended more than a year ago.
Shuichi Tanaka, chairman and chief executive officer of Shiseido International Corp. and Zirh International Corp. — both of which are divisions of Shiseido Cosmetics (America) Ltd., said during an interview Tuesday that while growth within the men's prestige skin care market is "interesting," it is a "crowded" category. "We decided to concentrate on John Varvatos and Shiseido for Men," he said. "With John Varvatos, we have fragrance [and] fragrance is a big focus for us. We believe in the potential of that brand."
Despite Shiseido's divestiture of a men's skin care brand, Tanaka asserted that men's prestige skin care is an important market for the company. "It's a fast-growing sector," he said, adding, "Still, the size of the market is limited, less than $100 million." Tanaka indicated focusing on two men's skin care brands — rather than three — would present fewer challenges.Zirh ranked third after Clinique's Skin Supplies for Men and Lab Series Skincare for Men, both owned by the Estée Lauder Cos. Inc., in the men's prestige skin care rankings last year.
Robinson said during an interview Tuesday afternoon he "was always very passionate about the brand and I still strongly believe in the men's market.
"The key," he added, "is figuring out the proper delivery to male consumers and how to go about doing that in a strategic way. We've had great success in department stores and [we are] figuring out how to extend the brand through premium products or proprietary Zirh stores.
"We're going to do some exciting things with the company," he said.
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