Shiseido’s Stateside ambitions: Firm pins hopes on Tory Burch venture to boost US profitability
Speaking at the company’s presentation of its 2019 first-half results, president and CEO Masahiko Uotani said improving profitability in the Americas was one of the key issues for the second-half of 2019.
“The important point here is that Shiseido’s fragrance brands are all European brands but now we can add this American brand to our fragrance portfolio. Overall, we have an expectation to grow fragrance sales and we also hope this would help improve the profitability of the Americas region,” said Uotani.
According to the company, its recovering business in America saw an uptake in fragrance and skin care while the make-up category declined.
The Dolce & Gabbana fragrance brand saw strong growth which grew 8.4% YoY in net sales on a local currency basis.
Dolce & Gabbana also performed well in EMEA thanks to the launch of its new fragrance, The Only One. Along with Narciso Rodriguez fragrances, Dolce & Gabbana helped to drive Shiseido’s double-digit growth in EMEA.
Shiseido sees big potential
Per the terms of the companies’ long-term exclusive worldwide licence agreement, Shisiedo will have the exclusive worldwide license to develop, market, and distribute Tory Burch beauty brands as of January 1, 2020.
The Tory Burch’s beauty license will be managed by Shiseido Group’s Americas division which is headquartered in New York City.
According to Shiseido, it will help Tory Bruch expand its global fragrance portfolio. Previously, Tory Burch fragrances were licensed by Estee Lauder Companies.
Shiseido hopes to capitalise on Tory Burch’s high-brand equity, mainly in the US, Asia and the Middle-East. The brand is available through 250 boutiques, 3,000 department stores and online.
“This brand as you may know… embodies American luxury, which is slightly different from European essence. The brand awareness is already high but beauty is a new category,” said Uotani.
He added: “With the support of Shiseido’s R&D resources, technology portfolio and Centers of Excellence, Shiseido is in an excellent position to help maximise Tory Burch’s significant potential and support future opportunities for growth and development.”
Marc Rey, CEO of Shiseido Americas and Shiseido Chief Growth Officer believes there is “tremendous opportunity” to grow the Tory Burch brand.
“Shiseido is honoured to provide Tory Burch with the resources to do so. By combining Tory’s beloved vision and the brand’s future-forward approach to digital, with Shiseido’s global platform and expertise in beauty and technology, this partnership has the ability to connect even more deeply with consumers and unleash the brand’s full potential.”
In addition to the brand’s potential, Uotani highlighted that Shiseido decided to work with Tory Burch because its values aligned with its own.
“I personally met with Ms Tory Burch. She started up the business herself and she has established a foundation to help women's empowerment and support entrepreneurs. I felt that we share the same sets of values. That's why we entered into this agreement.”