By  on April 28, 2005

NEW YORK — Kanebo Cosmetics U.S.A. Inc. is marking its fifth anniversary here by introducing Sensai Premier, a skin care trio that taps the pricing stratosphere of the specialty store treatment category.

Meanwhile, the firm’s $2.2 billion parent company, Tokyo-based Kanebo Cosmetics Inc., continues to find its bearings after being spun off by a beleaguered Kanebo Ltd. a year ago.

This week, Kanebo Cosmetics U.S.A. launched Sensai Premier — a 1.4-oz. cream for $650, a 4.25-oz. emulsion for $380 and a 5.1-oz. lotion for $300 — at Bergdorf Goodman, the brand’s original launch venue in 2000. Outside New York, the products, which are dubbed simply The Cream, The Emulsion and The Lotion, will be launched at 19 Saks Fifth Avenue locations beginning next month.

Although the question of who will pay more than $464 an ounce for face cream remains, Kanebo executives maintain it’s not that big of a jump from the existing antiaging creams the brand already markets. Prior to Sensai Premier The Cream, Kanebo’s most expensive item was a $500 antiaging cream.

Barneys New York’s vice president and divisional merchandise manager of cosmetics, Bettina O’Neill, who launched the brand three years ago, looks at it this way: “It’s a customer in her late 30s [who is] concerned about aging — and she doesn’t mind spending the money for a quality product.” O’Neill added, “Anti-aging is a big part of [Kanebo’s] business,” which she termed “extremely important” to the Barneys cosmetics mix. Kanebo is said to rank in the top 15 brands of Barneys’ Madison Avenue flagship, one of only about two-dozen stores that carry the brand in the U.S.

Kanebo’s airtight distribution notwithstanding, industry sources project that Kanebo Cosmetics U.S.A. will exceed $10 million in retail sales volume by yearend. The launch of Sensai Premier could drive a 10 to 15 percent increase in the firm’s retail sales, according to marketing manager Yumi Kobayashi.

Kanebo research has purportedly uncovered links between aging and DNA — specifically that DNA damage can follow skin damage caused by ultraviolet rays, among a number of other factors. According to Kobayashi, as skin cell turnover naturally occurs over a four-week span, “Sensai Premier promotes DNA repair in skin,” which can, in turn, combat damaged skin. Extract from a Japanese seaweed called gigartina tenella is said to produce “a 60 percent rate of repair of DNA function in the skin,” noted Kobayashi.While seaweed-based skin care products are nothing new, Kanebo claims Sensai Premier marks the first use of gigartina tenella in cosmetics. The products also boast no less than 18 active ingredients, addressing everything from cell energy and circulation to dark spots and free radical exposure. Sensai Premier officially targets 35- to 40-year-olds and up.

Kanebo is carried in only 23 doors in the U.S., including Bergdorf’s, Saks Fifth Avenue, Barneys New York and Takashimaya. Five additional Saks locations will begin carrying Kanebo next month in Beachwood, Ohio; Denver; Tampa and Orlando, Fla., and Birmingham, Ala.

Last week, Kanebo Cosmetics U.S.A. said it signed New York-based Fragrance and Beauty Services, led by Alan Beck, whose team of 18 account managers are set to oversee U.S. sales and store support for the Kanebo brand. Kanebo, whose cosmetics are carried at 4,000 doors in 51 countries, will launch Sensai Premier globally in August and September.

For Tokyo-based Kanebo Ltd., 2004 was a tumultuous year. Four months of negotiations for beauty giant Kao Corp. to buy Kanebo’s cosmetics business for $3.8 billion were broken off in February 2004 due to difficulties with Kanebo’s labor union. As a result, Kanebo’s eight company directors, including then-chairman and president Takashi Hoashi, tendered their resignations.

Kanebo Ltd. subsequently secured a $3.33 billion aid package from the Industrial Revitalization Corp. of Japan. That was followed by the formation of a Management Clean-Up Investigation Committee, headed by a former prosecutor at the Tokyo Public Prosecutor’s office. A restructuring plan ensued, which called for Kanebo to cut shareholder equity by 99.7 percent while requesting that lenders waive almost $1 billion in debt. The company sought nearly the same amount in new investments.

Kanebo Ltd. spun off its cosmetics business last May and the unit was taken over by Kanebo’s 30-year-old subsidiary, Kanebo Boutique. Kenji Chishiki was appointed president of the company. Chishiki remains president of Kanebo Cosmetics today and Tetsutaro Muraki is the firm’s chief financial officer.

Generally speaking, the strategy for Kanebo’s U.S. arm, which is led by president Makoto Nakamura, is to continue strengthening the brand’s existing doors. This paid off last year, when the brand’s comparable store sales jumped 40 percent last fall compared with the same period in 2003.Kanebo markets about 150 items in the U.S. and treatment products make up about 70 percent of this business, while the remaining 30 percent is generated by color cosmetics. Kanebo lipsticks go for $50.

Sampling is one of Kanebo’s strong suits and the brand sends samples to celebrities and makeup artists to generate buzz. The firm even invited celebrities to come to Bergdorf’s last week before the store opened for Kanebo facials and Sensai Premier shopping. More traditional support for the Sensai Premier launch will come in the form of advertising in retailer catalogues and W magazine, a sister publication of WWD.

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