By  on August 4, 2011

Shiseido Co. has its eyes trained on the U.S. as the beauty giant to seeks to unhinge the company’s future from Japan and grow into a global powerhouse rooted in Asia.

“For us, the U.S. market is extremely important,” said Hisayuki Suekawa, the firm’s president and chief executive officer, who spent the week in New York and San Francisco meeting with company employees and investors. He departs for Japan on Saturday.

“To a large extent the rest of the world looks to the U.S. as a market leader,” Suekawa told WWD on Monday, speaking through an interpreter. “There are trends here that the rest of the world aspires to. It’s incumbent upon us to build a strong brand here. That will have a tremendous impact on us being able to grow our customer base.”

Suekawa said a number of the company’s portfolio brands will shoulder the group’s U.S. expansion, including its flagship Shiseido, Nars Cosmetics, Clé de Peau Beauté, its designer fragrance business Beauté Prestige International, and the recently acquired Bare Escentuals, which broadens the firm’s distribution channels to include infomercials and deepens its knowledge of e-commerce and stand-alone boutiques.

A mere four months into his post as ceo, Suekawa is determined to significantly grow Shiseido’s business in the U.S. and beyond. Japan currently accounts for 57.1 percent of the company’s sales, which totaled 670.7 billion yen, or $8.07 billion, for the year ended March 31. Suekawa aims to shift that percentage down to 50 percent by 2017, as Shiseido strengthens its footing in markets outside its homeland.

“Europe and North America are locations where we feel we have the most [opportunity] to grow our prestige business,” said Suekawa. China also is top of mind. “The Chinese market is a rapidly growing market so we have high hopes for China,” he said.

Suekawa, who is entering his 30th year at Shiseido, said of the company, “In the past, we tended to be very Japan-centric: Our product and our IT were very focused on Japan. That was fine back then, but as we move forward we need to have a global standard that is common to all markets in which we operate,” he said. The company’s products are currently sold in 85 countries. “It’s tough for a guy like me who has spent 30 years at the same company, always within Japan, to be able to respond to this growing need. But, if we want to succeed as we go forward, it’s essential that we do this,” said Suekawa.

His trip to the U.S. follows a similar one to Europe in July, and another is planned for September to China and other parts of Asia.

“I don’t think you will find another ceo in the company’s history who has traveled to all of the Shiseido’s offices at the kind of speed that I have,” said Suekawa.

His comments are not meant to be boastful. In fact, during his first 100 days as ceo at the 139-year-old company, Suekawa traveled throughout Japan, visiting all of Shiseido’s offices there. And of course, there were unforeseen issues to attend to. Less than three weeks before he took over the corner office, the devastating earthquake and the tsunami that came in its wake hit Japan.

“The first thing that I did upon becoming ceo was to ask my staff, ‘When can I visit the parts of Japan that have been most heavily hit?’” he recalled. Several weeks into his tenure, Suekawa visited the northeastern part of the country to assess the damage. Fortunately, the company’s entire employee base was spared. Now the country is weathering brutal summer temperatures while its citizens work to scale back energy usage as power plants are shut off intermittently for inspections, he said.

In the Tohoku region, the area hardest hit by the earthquake and tsunami, roughly 300 points of sale for Shiseido were heavily damaged. Suekawa said that many of them — about 190 — have begun operating again, but he cautioned the economy has yet to recover as hordes of people have relocated from the area. Tourism also has suffered. “Another major hit we took is that we used to have a lot of Chinese customers who traveled to Japan to visit stores that sold our products, but right after the earthquake most of these people stopped coming.”

He said some reports from June and July showed a recovery of some traffic, but fewer foreign visitors is taking a toll on revenue, particularly for department stores in the Tokyo metropolitan area.

Despite its interests aboard, Shiseido is focused on improving its business in Japan.

“One of things I need to do as soon as possible is to help rebuild and recover our position in the Japanese market. We are revisiting our whole product list to see where we can make improvements,” said Suekawa, noting that the Japanese market is small in scale, but competition is fierce. In the past, Shiseido relied on a spate of seasonal launches, backed by aggressive advertising, to spur sales. “We’ve gotten to the point where we have to acknowledge that times are different now. One of things we are doing this year is to halve the number of new product releases in Japan. In the past we have [introduced] anywhere between 500 to 600 stock-keeping units into the market. This year it will be half of that, which means we can make significant cost savings both in terms of personnel and financial costs. We will be plowing these savings back into developing new research for better formulations and into ensuring that the quality of our beauty consultants is better than it has been the past.”

Suekawa’s propensity for doing things differently extends to his management style. He’s bent on demystifying the ceo post. “The thing that I have given the most priority is to go out and spend as much time as possible with our employees who work on the front lines of the business. When I was on the front lines, before I ever became a manager, to me a ceo tended to be somebody who was far removed from anything that I had to do,” Suekawa recalled. “These were people who lived above the clouds as far as I was concerned.”

He admitted the only time he saw the leader of the company was generally in a photograph next to a newspaper article about the firm. “I would like to set a different example. I’d like to spend more time standing with the people who work for Shiseido explaining what I hope to achieve from the business and hearing from them what their opinions are, especially in Japan where we face our most serious issues.”

To access this article, click here to subscribe or to log in.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus