TOKYO — Kosé Corp., Japan’s third-largest cosmetics company, is, like other beauty players and consumer goods makers, facing challenging conditions as Japan’s economy stagnates and the country’s shrinking population ages.
The Tokyo-based company trades almost exclusively in Asia and its portfolio includes prestige cosmetics and skin care brands Cosme Decorte and Sekkisei as well as licenses with Stephen Knoll New York, Jill Stuart, Anna Sui, Rimmel and Sonia Rykiel. Just recently, Kosé announced its foray into men’s beauty products through an agreement with Coty Inc. to manufacture and distribute Adidas-branded facial washes, deodorants and other goods.
Kazutoshi Kobayashi, president of Kosé Corp., acknowledged in a recent interview that Japan’s beauty market has been tough but there were signs of improvement at the end of last year.
“Some people might be saying that 2010 will be a bad year, but I don’t really believe that,” said the executive at the family-run company. “It will be tough to grow sales by 5 percent or something close to that but I don’t think sales will actually decrease.”
Kobayashi noted the increasing polarization of the beauty market, explaining Kosé is seeing the most success with its high-end luxury products and more affordable, cheaper ranges for drugstores.
“There’s a lot of competition in the market because even nonbeauty companies have started making cosmetic brands and products,” he said.
The executive also said Kosé is experimenting with alternative distribution methods as department stores struggle to stay competitive. Japanese department store sales have been declining for more than a decade amid a stagnant macroeconomic climate and increasing competition from monobrand stores, shopping centers and fast-fashion brands. Many chains are closing underperforming units — just last week, Seibu announced it will shutter its historic flagship in Tokyo’s Ginza district.
“I think this year, there will be lots of new places to buy cosmetics,” Kobayashi said, adding that Kosé recently opened a store for Jill Stuart cosmetics in Tokyo’s Shinjuku train station. The executive also said the company is considering selling products online and at hair salons.
“The [Japanese] market is actually getting smaller, but for Kosé there are still many different areas we’ve not explored yet,” he said, speaking in a room adorned with an oil painting of his grandfather and the company’s founder Kozaburo Kobayashi. “By entering these new areas, we hope to counterbalance the shrinking of the market.”
Much like its larger rival Shiseido, Kosé is looking to broaden its international reach. Only about 10 percent of the company’s business is generated overseas in places such as Hong Kong, Taiwan, Mainland China, South Korea, Southeast Asia and Dubai. But Kobayashi said the company is interested in expanding to new markets such as Russia, Brazil and India.
Kosé is also interested in making acquisitions but hasn’t yet found the right target, he said. Last month Shiseido launched a $1.7 billion tender offer for California-based Bare Escentuals, giving it a greater presence in the U.S.
Kosé entered the Chinese market about 20 years ago, but Kobayashi said the company erred in coming in exclusively on the lower end of the market and it’s working to upgrade its image. Until now, the company made products exclusively for the Chinese market, but that’s set to change. Last year, the company launched its prestige Cosme Decorte line of skin care products and cosmetics in Beijing, and Kobayashi is pleased with the results so far.
“So now we think we’ll be selling Chinese consumers a lot of the same products we sell to Japanese consumers,” he said.
Although a host of international beauty players is descending on China, Kobayashi said he thinks Japanese brands have a competitive edge.
“Even though there are a lot of Western cosmetics companies such as Procter & Gamble and L’Oréal, which are also coming into the Chinese market, I think Japanese brands have some advantages like high-quality skin care products and a good record in research and development,” he said.
“Even at Japanese department stores like Ginza Mitsukoshi, the consumers buying the most luxury products are the Chinese,” he observed.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty