MOODY'S CUTS SHISEIDO RATING

TOKYO--Moody's Investor Service placed Shiseido Co.'s long-term debt rated double-A3 under review for a possible downgrade.
The rating company said the review will focus on the beauty firm's ability to regain previous levels of profitability in the difficult operating environment.
Moody's noted that it will also consider the impact of the changing legal environment, following the ruling of Japan's Fair Trade Commission on the cosmetic market's overall pricing practice and its possible consequences on Shiseido's long-term earnings. Moody's added that margins have been under pressure at Shiseido due to increased pricing initiatives of retailers, consumers increased awareness of prices and their shift toward self-select purchasing, which are driving the company to review its pricing strategy, product mix and distribution system and cost structure.
For the fiscal year ended March 31, Shiseido's consolidated sales came to $6.4 billion (540.4 billion yen).--Fairchild News Service

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