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L’Oréal USA said Monday that it will close all U.S. operations of Shu Uemura Cosmetics.
This story first appeared in the March 30, 2010 issue of WWD. Subscribe Today.
L’Oréal took a 35 percent stake in Shu Uemura in 2000, going on to acquire a controlling interest in November 2003. The brand’s current U.S. distribution was forged in 2004, although selected stockkeeping units entered the American market in 2003.
“This decision is about our desire to focus on growing the larger brands in the Luxury Products portfolio, not because the brand isn’t vibrant and beautiful,” Carol Hamilton, president of L’Oréal USA’s Luxury Division, told WWD Monday. In addition to Shu Uemura, the Luxury Division contains the Lancôme, Yves Saint Laurent, Giorgio Armani, Ralph Lauren and Kiehl’s brands, as well as a number of fragrance licenses, including Viktor & Rolf and Diesel.
“We love the brand, but it is a very small part of our portfolio,” Hamilton said of Shu Uemura. “It’s a simple decision after a very complex analysis: we have a very large portfolio, and we want to focus on growing the brands which have a larger presence in the U.S. market.”
Shu Uemura is available in 18 countries; the decision does not affect any other market. The brand is said to do about 80 percent of its business in Asia.
While Hamilton declined to comment on the size of the Shu Uemura brand in the U.S., industry sources estimated that it currently generates sales of around $20 million at retail annually. In the U.S., the brand is available in just under 100 doors, including Neiman Marcus, Barneys New York, Bergdorf Goodman and Nordstrom. L’Oréal USA also operates four freestanding Shu Uemura boutiques; Hamilton said a final decision has not been made as to what will happen with that real estate. It could be used for additional freestanding Lancôme or Kiehl’s doors, as the company operates its own stores for both brands.
Hamilton said retailers have been informed of the Shu Uemura decision and that L’Oréal USA is working closely with those retailers to develop exit plans. “We are working with retailers on a case-by-case basis,” she said. “There is no set exit date across the board. Depending on the space, it is likely that the exit strategy will take place over the next several months.”
Hamilton declined to discuss the number of employees affected by the closure.
For the future, American consumers will be able to purchase the products online at shuuemura.com, said Hamilton.
“Globally, Shu Uemura continues to be a very dynamic luxury brand,” stated Marc Menesguen, president of Luxury Products for L’Oréal SA. “The brand has seen strong growth around the world and we’re confident that it will continue to deliver revolutionary innovations to consumers.”
The line’s namesake, a Hollywood makeup artist, began mixing and selling his signature Cleansing Oil in 1960; it continues to be one of the brand’s best-selling stockkeeping units in Asia. Uemura died in Tokyo on Dec. 29, 2007, at the age of 79.