Shiseido Closes Investment Unit
TOKYO — Shiseido said it plans to dissolve its subsidiary, Shiseido Investment Co. Ltd., and the funds it managed.

Shiseido incorporated the investment subsidiary in 2000 with the aim of supporting new ventures. The subsidiary oversaw three funds: Shiseido Investment Fund with capital of 1.5 billion yen, or $12.6 million; Shiseido Beauty Fund with capital of 1 billion yen, or $8.4 million, and Cosmetics Voluntary Chain Store Fund, with capital of 110 million yen, or $900,000. About 90 percent of the funding for Shiseido Investment Co. Ltd., or 10 million yen ($84,000), came from Shiseido, with the remainder from NIF SMBC Ventures.

The funds have invested in about 100 companies. Shiseido is dissolving the venture because it believes it has achieved its original targets. The three funds will return capital to investors on Feb. 28 and liquidation of the subsidiary is expected to be completed around June 2007. The dissolution will have no significant impact on Shiseido’s operating results for the fiscal year ending March 31.

Meanwhile, Shiseido plans to outsource logistics operations currently performed by its subsidiary Shiseido Logistics Company Ltd. to Hitachi Transport System Ltd. Under the arrangement, Shiseido Logistics shares will be transferred to Hitachi Transport System, while logistics-related facilities will be sold to ProLogis K.K. and Hitachi Capital Corp.

Since fiscal 2005, Shiseido has been pursuing a three-year plan to speed its growth and improve profitability. “In order to adapt skillfully to future changes in the retail distribution environment during these reforms, management established the urgency of improving and raising efficiency in the quality and services of the logistics business through cooperation with Hitachi Transport System,” the company said.

The new outsourcing arrangement will help Shiseido focus its management resources. Because the final transfer of stock and property will not be completed until April, the logistics sale will have little impact on the results for the current fiscal year. The share and asset transfer may result in extraordinary income of 3.4 billion yen, or $28.6 million, on a nonconsolidated basis, and 2.8 billion yen, or $23.5 million, on a consolidated basis for the fiscal year ending March 31, 2008.

This story first appeared in the January 3, 2007 issue of WWD. Subscribe Today.

Shiseido plans to send one part-time director to sit on the board of the logistics subsidiary after the share transfer.
Koji Hirano

Testing Increases at Peritesco
PARIS — Increased regulations and an emphasis on transparency in the cosmetics industry are spurring business at Laboratoires Peritesco, a French biomedical research center that tests products for safety and efficacy.

The Paris-based firm conducts more than 800 trials of products — from mascara to moisturizer — a year for clients including L’Oréal, Procter & Gamble and Unilever.

Laboratoires Peritesco’s chief executive officer, Dr. Marc Pericoi, said increased product regulations worldwide and consumer pressure are increasing demand for clinical trials by about 20 percent each year.

“Regulations are becoming stricter in China, in Russia and in Europe,” he said. “Our customers are obliged to provide proof of everything that they sell and the claims they make. And if they can’t — if their product information is unsatisfactory — they will be forbidden.”

Pericoi was referring, in particular, to two recent cases. Namely SK-II, which was withdrawn from China in September by its maker, Procter & Gamble, after a watchdog group claimed it found chromium and neodymium in nine products. (The products have subsequently been cleared.) There is also Carole Franck, the French aromatherapy brand, which was banned in October after benzene was found in some of its products and the firm failed to supply correct labeling for its ingredients.

Laboratoires Peritesco opened a center in Shanghai in September to service the growing demand from its customers entering China. The 6,460-square-foot site hosts clinical studies in ophthalmology and dermatology on local volunteers.

“China is showing the most activity; many Western firms are setting up there that need to adapt to the Chinese market,” said Pericoi. “In the same vein, many Chinese firms are looking to expand abroad and want to adapt their offer to meet Western standards.”

Pericoi explained most clients turn to the laboratory for product verification after carrying out their own in-house evaluations.

Testing methods include examinations by doctors and dermatologists, microscopic images and subject reports. Tests are used to check the efficiency of products. So, to measure the efficacy of a slimming cream, the firm uses silhouette images, and for an antiaging face cream, machines are employed to test the skin’s elasticity, for instance. Laboratoires Peritesco also examines products in different temperatures. Additionally, it conducts tests in real conditions, using its mobile units, and product safety.

Laboratoires Peritesco has a pool of 10,000 volunteers in its Paris center, another 5,000 in Montpellier, France, and 2,000 in Warsaw, Poland. Trials can include 10 to 15 subjects for mascaras to 400-plus subjects for product tolerance tests.

Cost ranges from 20 euros, or $26.55 at current exchange, for a simple patch trial lasting an hour to up to 1,000 euros, or $1,328, for a six-month product test.
Ellen Groves

Perfumery Award for Villoresi
MILAN — An Italian perfumer has beat out his French counterparts to win one of the industry’s most coveted awards.

Lorenzo Villoresi received the François Coty perfumer of the year award, organized by the François Coty Association.

Villoresi was named the 2006 premier in the seventh edition of the award ceremony at Château d’Artigny in Paris. The nose founded his own fragrance house in 1990 in a 15th-century palazzo in Florence. His work includes perfumes and home fragrances in addition to personalized fragrances for private clients.

This year, Villoresi will open a perfume school in Tuscany to train future Italian noses.
Stephanie Epiro

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