TOKYO — Shiseido Co. Ltd. named Morio Ikeda as its next president, chief executive officer and chief operating officer Tuesday.
Akira Gemma, the current president and ceo, will assume the post of chairman. Senior executive director Shigeo Shimizu will assume the post of senior executive vice president, and the current chairman, Yoshiharu Fukuhara, will retire as a director and assume the post of honorary chairman.
The appointments are expected to be approved at the shareholders’ general meeting in late June and the subsequent meeting of Shiseido’s board of directors.
“I am honored to be chosen for this position, though I had not anticipated it,” said Ikeda. “I had been assisting successive Shiseido presidents to the full, and I was set to continue in that role for the remainder of my career.”
“In addition to enhancing Shiseido’s business operations, I will also work to strengthen Shiseido as a company, which shoulders wider social responsibilities,” said Ikeda, who was born in 1936 and has had a 40-year career with Shiseido.
Masako Matsukawa, analyst of Tsubasa Research Institute Ltd., noted that the Japanese beauty giant had given a number of reasons why it made the changes at this time. Shiseido is currently pursuing its “Global Multi/brand Strategy,” and in recent years has achieved double-digit growth in overseas sales. But the domestic business has been mired in an intractable recession at home. Accordingly, Shiseido is reforming its operations, effective April 1, to reinforce its sales efforts.
On Feb. 21, Shiseido announced the drastic reform plan for the domestic business. The firm is to improve its structure, including unifying its headquarters functions with the same functions of Shiseido Sales Co. Ltd. The reform also includes reducing existing brands from 80 down to 30.
Shiseido said it is “undertaking this structural reform to revitalize the Shiseido group’s core business, cosmetics, particularly the domestic cosmetics business.” The firm earlier had projected a net loss of $370 million for the year ending March 31, versus an earlier forecast of a $293 million loss and prior-year net income of $132 million. Dollar figures are converted from the yen at the current exchange rates.
Sales for the year, originally projected to reach $5.25 billion, are now forecasted at $5.17 billion, slightly above last year’s $ 5.14 billion.
Matsukawa was careful to point out that the continuing slowdown of its domestic business “is not Gemma’s fault. [He] followed what Fukuhara had done before and administrated the group’s business with firm steps.”
Another industry analyst, however, said that Shiseido management must now show enthusiasm for its reform plan.
Ikeda, who joined Shiseido Co. Ltd. in 1961, has spent much of his career working in the company’s secretarial and general administration departments, rising to director and general manager of the secretarial department in 1990. In 1997, he also gained responsibility for the departments related to communications, including public relations and advertising.
In addition, he took over environmental policy in 1998. For the past year, Ikeda has had overall responsibility for the “Skin Care House Shiseido” project to expand the company’s market share in treatment. Shiseido credited Ikeda with masterminding the April 1 domestic reform plan. “In all his managerial positions, Ikeda has shown great determination to enhance still further the operations of Shiseido,” the firm stated.
Ikeda has also given support to successive presidents of Japan Cosmetics Industry Association, and contributed significantly toward the development of the cosmetics industry.
The company described Ikeda “as being a very familiar face to Shiseido staff and to people throughout the cosmetics industry. He has strong personal connections with figures from the worlds of politics, public administration and commerce. He is noted for his earnest approach and modest personality.”
“For the present, Shiseido’s reform plan sits on the top of its priority list,” said one industry observer. “And in order to promote the plan, it is suitable to have a person who understands the market and business customs in Japan, as well as the direction of Shiseido that the successive presidents have led.”