SHISEIDO PROJECTS NET LOSS FOR YEAR

NEW YORK — Shiseido Co. Ltd. has further tempered its sales and earnings expectations for the year ending March 31 and instituted a series of restructuring moves aimed principally at improving results in the slumping Japanese market.
The Tokyo-based cosmetics giant now projects a net loss of $374.5 million for the year, versus an earlier forecast of a $296.1 million loss and prior-year net income of $133.2 million. All dollar figures have been converted from the yen at current exchange.
Sales for the year, originally projected to reach $5.36 billion, are now forecast to come in at $5.23 billion, only slightly above last year’s $5.2 billion.
In a statement, the company said that, despite “aggressive investments” in advertising and promotion, “especially to support its domestic cosmetics business, we now believe that, due to the effects of depressed personal consumption, we will not achieve our original net sales targets.”
Most affected by the slump have been sales in Japanese convenience stores and in “certain mainstay makeup lines,” Shiseido noted. A “drastic reorganization” of sales functions is being implemented in which selling functions will be divided into two groups, one servicing “organizational retailers” and the other independent stores, including pharmacies.
The company is also launching a logistics division to better monitor and react to sales and inventory developments with customers and share data internally. Pricing is becoming more centralized, and further reorganization moves are expected.
For fiscal 2002, Shiseido plans to expand domestic sales and expects “a continuation of high-level growth in overseas sales.”

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