Shiseido and Burberry will sever ties and end their global contracts, including those in Shiseido’s domestic market.
The distribution relationship lasted over 18 months and saw the Japanese heavyweight distribute Burberry beauty products including fragrances around the world.
As Shiseido ramps up its efforts to reach its mid- to long-term management strategy, Vision 2020, its recent press release cites this strategy as its reason for termination.
The company now gears towards restructuring its brand portfolio through implementing policies to improve business productivity and profitability.
Shiseido will focus on “the selection and concentration of its business operations” and will seek to now “place emphasis on nurturing the existing fragrance brands including Dolce＆Gabbana and narciso rodriguez”.
However, Shiseido intends to further expand its fragrance business through focusing on long-term licensing or brand acquisition.
Shiseido and Burberry: the relationship
The agreements, which CDA announced in June 2015 as the duo prepared to replace Shiseido’s licensed products with the Burberry global product range in summer 2015, were signed via Shiseido’s EMEA headquarters located in Paris, France.
Toru Sakai, the representative director for Shiseido, commented: “This new partnership with Burberry is a significant one as we look to build our portfolio of products and enhance our presence in the luxury beauty market.”
Burberry’s latest deal
Shiseido’s announcement came a day after Burberry revealed that it has teamed up with beauty brand, Coty as it looks to expand into the global beauty space.
In a partnership said to be worth £180 mn, Coty is expected to pay £130 mn (€151.9 mn) for a ten-year licence that will enable it to manage Burberry's perfume range, as well as £50 mn (€58.4 mn) in stock and other assets. The deal, which will start in October 2017, will also see Coty pay royalties to Burberry.