By  on April 13, 2007

TOKYO — Kanebo Cosmetics is implementing a revitalization plan aimed at increasing by 2010 consolidated net sales by 25 percent — to nearly 270 billion yen, or $2.27 billion at current exchange — expanding operating income by 10 percent, and growing overseas sales to 15 percent of revenues.

Kanebo's cosmetics division, which has been the second-leading manufacturer in the Japanese cosmetics market in terms of volume for many years, was spun off by the heavily indebted group and acquired by Kao Corp. in January 2006.

As part of the three-year plan, Kanebo Cosmetics is aiming to generate new businesses in health and beauty care. It would like to maintain steady growth of its existing cosmetics business in Japan by doubling from six to 12 the number of brands that generate more than 10 billion yen, or $84 million dollars, in annual sales.

Internationally, Kanebo Cosmetics views Europe, the Middle East, the U.S., China and Asia as its key markets overseas. Kanebo Cosmetics projects that growth of overseas sales, which now stand at about 10 percent of revenues, will come from China. In Europe and the U.S., where Kanebo Cosmetics would like to boost average annual sales by at least 5 percent, the firm will focus on distribution in selective perfumeries and department stores, respectively.

The brand name, Kanebo International, will eventually be changed to the name of the company's core line, Sensai.

"This will differentiate the corporation, Kanebo Cosmetics, from the brand," according to the firm, "and enhance the overall brand value in the prestige market."

Beginning in the fall, Kanebo will redesign its counters in key department stores and introduce a Customer Relationship Management system in key stores in order to strengthen customer service. The firm also plans to partner with upscale salons and hotel spas while enhancing its professional skin care service offering.

As for China, Kanebo Cosmetics is positioning its brands in two main distribution channels in the prestige cosmetics market — selective department stores and upscale pharmacies. The firm is already marketing Aqua, a locally manufactured brand developed to meet the skin care needs of Chinese women, and the prestige brand Kanebo International. In China, Kanebo Cosmetics plans to increase department store distribution of its Aqua, Kanebo International, Impress and Lunasol brands to 500 doors from 242 today.Further plans call for accelerated development of Kanebo Cosmetics mail order business as well as its Internet and TV sales channels.

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