TOKYO — Leslie Blodgett, chief executive officer of Bare Escentuals, will spend much of today showing Japanese beauty editors how to buff the company’s powdered mineral-based foundation and achieve a polished look. This is her second trip to Japan in four weeks, and it’s only the beginning of the executive’s increasingly global quest to reach new customers.
If Shiseido’s $1.7 billion tender offer for Bare Escentuals proceeds as planned, the San Francisco-based cosmetics company will be poised to expand beyond its core market of the United States to Japan, China and a host of other countries. Bare Escentuals has already been present here for a few years on the QVC shopping channel, and the brand is preparing to open its first Japanese retail point in Tokyo’s Isetan department store come March, a development that was in the works before Shiseido made its bid.
“We always had plans to come into Japan and Asia in a big way,” Blodgett said Wednesday during a joint interview with Shiseido president and ceo Shinzo Maeda. “[But with Shiseido’s help] we could do it faster; we could do it with knowledge and resources.
“We have a nice loyalty with Japanese women, and we get letters just like we do at home,” said Blodgett, dressed in a black, purple and brown swirl-pattered dress. Blodgett and Maeda said it’s too early to give sales forecasts or outline a specific strategy for the company since the offer has not been completed. The executives said they plan to form a new strategic team, consisting of individuals from both sides, to plot the company’s future. But Blodgett said she is keeping her management team, and Bare Escentuals, which posted sales of $556 million in 2008, will continue to be based in California.
Separately, on Tuesday, Dallas-based Kendall Law Group said it is investigating Shiseido’s proposed tender offer and whether Bare Escentuals board members may be “unlawfully benefiting from the transaction because key management will remain at the company following the buyout.” A Bare Escentuals spokeswoman did not respond to requests for comment as of press time.
In line with his statements last week, Maeda reiterated that both companies stand to gain from the transaction. Bare Escentuals could leverage Shiseido’s vast retail network in Asia to break into new markets and use its research and development capabilities to develop new products. Shiseido would boost its rather small presence in the U.S. and would gain from Bare Escentuals’ expertise in television and Internet shopping.
Blodgett sounded particularly interested in launching skin care products, an area in which Shiseido has excelled. “We will definitely be more well-rounded,” she said. “Our skin care business will be a huge percentage of our business going forward.”
Maeda stressed the two companies will combine their resources, but they won’t be fully integrated; he wants to keep the corporate culture of each in tact. “We are to maintain the autonomy and independence of the two companies,” he said.
Maeda first approached Blodgett in the summer and visited her in September to finalize the deal, bearing a sampling of the Japanese company’s own line of cookies and chocolates — a big hit with Blodgett. “They bring gifts — that’s news for us,” she said with a laugh. “My husband doesn’t even bring me gifts.”
Blodgett, who joined Bare Escentuals as ceo in 1994, said she had a high opinion of the Japanese beauty giant as far back as the start of her career. “When I worked behind the cosmetics counter back in the Eighties — the early Eighties — in Bloomingdale’s in New York City, Shiseido was [about] the delicious and beautiful formulas and very prestige,” she said. “Obviously my opinion’s enhanced after getting to know them.”
Shiseido has had its share of setbacks establishing a presence in the U.S., including a scrapped joint venture with The Limited and the discontinuation of its 5S product line. “Probably we did not have enough knowledge in deploying those respected brands in the U.S.,” Maeda said, explaining the Bare Escentuals acquisition will give Shiseido considerable strength in the region.
Blodgett said she thinks she brings another advantage to Shiseido as well, alluding to her potential investor’s male-dominated ranks. While Shiseido has been credited with giving women more job opportunities than many other Japanese companies, its upper ranks are almost exclusively occupied my men. Kimie Iwata, Shiseido’s vice president, is the only female member of the company’s 10-person board.
“I like the fact that I’m a woman around this company,” Blodgett quipped. “I think that is a good thing.”
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