TOKYO — Shiseido Co., Ltd revised its net profits projection upward by 8.7 percent for fiscal 2004, partly as a result of a reduction in the amount it pays into its employee pension fund.
The extraordinary income deriving from the pension fund changes will be partially offset by expenses entailed in a group restructuring. As a result, projected net income will be $238.1 million, or 25 billion yen, which is $19.1 million, or 2 billion yen, higher than the previous forecast. For fiscal 2003, the cosmetics company earned consolidated net income of $233.3 million, or 24.5 billion yen. Dollar figures were converted at current exchange rate.
As a result of the pension fund change, Shiseido expects to record extraordinary income of approximately $254.3 million, or 26.7 billion yen, on a consolidated basis and $91.5 million, or 9.6 billion yen, on a non-consolidated basis for fiscal 2004.
While Shiseido boosted its earnings forecast, it revised its sales outlook downward to $5.95 billion, or 625 billion yen, which is $66.7 million, or 7 billion yen, lower than the previous estimate. These lower sales, compounded with prior investments, are expected to produce ordinary income of $333.3 million, or 35 billion yen, which is $57.1 million, or 6 billion yen, below the previous forecast.
Meanwhile, Shiseido and Coca-Cola (Japan) have jointly developed a new brand, “aroma works” under the common concept of “aroma.”
Based on the aroma theory of grapefruit scent, Shiseido will launch a body care lotion, “Body Stylish Mist,” while Coca-Cola (Japan) introduces diet water, “Body Style Water,” on April 21. Coca-Cola and Shiseido will leverage their marketing and sales capabilities for the promotion. Both products will be available in limited quantities in Japan only. — Koji Hirano
Vorwerk Gets Jafra
BERLIN — Vorwerk and Co. KG, Wuppertal has acquired 100 percent of Jafra Cosmetics, the California-based direct marketer of beauty products. New York private equity investment firm Clayton, Dubilier & Rice Inc. had possessed 84 percent of the firm. Terms of the deal were not disclosed.
More than 400,000 consultants sell the Jafra range of premium skin care and body care products, fragrances and color cosmetics in its main markets of Mexico and the U.S., as well as in Brazil, Argentina, Germany, Austria, Switzerland, the Netherlands, Italy and Thailand. Annual sales were placed at $400 million.
CD&R bought Jafra, which was founded in 1956, from The Gillette Co. in 1998. Although Jafra was put on the block in 2002, CD&R then apparently changed its mind and completed a $290 million recapitalization of the brand in May 2003. In this five-year period, company profits increased 400 percent, CD&R said.
The 100-year-old Vorwerk Group is a global family enterprise. Its core business is the direct sales of high-quality household appliances, as well as industrial and financial services and carpets. In 2003, group sales reached $2 billion, 37.5 percent of which was generated by its direct sales activities.
Noting that cosmetics, fragrances and skin care products are the largest and fastest-growing direct sales segment worldwide, Vorwerk said the Jafra acquisition will boost group sales to $2.5 billion.
“The company’s corporate culture and its advisory-oriented sales approach using trained consultants to market Jafra’s high-quality, brand-name products all fit perfectly into Vorwerk’s corporate strategy,” Achim Schwanitz, managing partner of Vorwerk, said. He added that Jafra’s management team, lead by Jafra chairman and chief executive officer Ron Clark “will continue to lead the company as a separate entity within the Vorwerk Group.”
Jafra, which started as a family company, was created by Jan and Frank Day, out of their home in Malibu, Calif., with a mission of providing career opportunities for women while still being able to focus on their families. The company continues to place an emphasis on women’s empowerment today. — Melissa Drier
PARIS — Lancaster Group, the prestige division of Coty Inc., was the official sponsor of the International Forum of Cinema & Literature, which took place in Monaco, the company’s birthplace, from March 25-28. Among the attendees were authors Mary Higgins Clark and William Kennedy.
At the event, the Lancaster prize for best European film adapted from a novel went to Yann Moix for “Podium.” This was the third consecutive year Lancaster sponsored the event.
PARIS — L’Oréal Professionnel and the Paris-based architecture school L’Ecole Camondo jointly hosted a contest in which students were asked to design a hair salon of the future with an emphasis on its selling space.
Four groups of winners were recognized for their work: Two teams won the “coherency prize”; one got the “innovation prize,” and a fourth was awarded the “anticipation prize.”