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.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)