Photo Rachel Cheng

Facing strong headwinds, Shiseido offloads three businesses to private equity – at a significant loss.

Shiseido is one of the oldest cosmetic companies in the world. Listed on the Tokyo stock exchange it has over 33,000 employees and sales of US$8.6b. However last year Shiseido produced a loss, a sharp contrast to the previous 4 years. The reason: higher than expected sales and general expenses.

The company has always had global ambitions and several years ago appointed the ex-head of Coca Cola Japan as its President. 

Last week it announced the sale of three North American businesses, bareMInerals, Buxom and Laura Mercier for approximately 65% of what the company originally paid. In the last 12 months Shiseido divested another personal care business to private equity.

Photo: Laura Mercier

According to news reports Shiseido’s revenues have been negatively impacted by Covid – fewer people going to the office and entertaining; operating losses in North American surged three-fold.

Shiseido was a fund manager’s favourite (Lindsell Train, Vanguard and BlackRock all own significant stakes). It’s long established with strong domestic sales, had big growth potential with tourism and a globally minded CEO. However times have changed and certainly the foreign funds will not have been watched nonchalantly.

Shiseido are not withdrawing from the US, it maintains brands like Nars and Drunk Elephant, but clearly this is a significant set back.

It is also another example of a large Japanese corporate over-paying for acquisitions and failing to integrate them.