Reinforcing recovery: Kosé outlines plans to maintain Tarte sales recovery from COVID-19 pandemic

By Amanda Lim contact

- Last updated on GMT

Kosé Corp is expecting the performance of Tarte Cosmetics to be “better than expected” this year. [Tarte Cosmetics]
Kosé Corp is expecting the performance of Tarte Cosmetics to be “better than expected” this year. [Tarte Cosmetics]

Related tags: kose, Cosmetics, financial results

Japanese cosmetics firm Kosé Corp is expecting the performance of Tarte Cosmetics to be “better than expected” this year and has plotted strategies to maintain the brand’s post-pandemic recovery.

Sale of Tarte Cosmetics improved by 6.8% to JPY15.6bn (U$136.5m) in the first half of the firm’s 2021 fiscal year as consumer spending in North America and Europe recovered with the end of pandemic restrictions.

This stabilised the prestige make-up market and Tarte observed strong repeated sales rates for concealers like its Shape Tape Contour Concealer.

In 2014, Kosé acquired a 93.5% stake in Tarte Cosmetics for a reported U$135m to gain a foothold in the US market.

After the acquisition, the group collaborated with Tarte to develop the vegan beauty brand Awake, which debuted in 2018.

Kosé’s portfolio of brands also includes Decorté, Sekkisei, Addiction, and holds the licensing agreements for Jill Stuart and Paul Stuart.

In 2020, Tarte was severely impacted by the COVID-19 pandemic lockdowns and restrictions

Despite the strength of its e-commerce sales, the growth was not enough to offset the decline of brick-and-mortar sales. This decline saw the company’s sales in North America decrease by 22.3%.

Sales of Tarte, coupled with the strong sales in China, helped to boost Kosé’s overseas sales ratio to 42.4% as domestic sales declined.

Positive outlook

The performance of the Tarte has proven to be consistent with the previous forecasting and Kosé is now optimistic that the full-year performance will be “better than expected” ​with the boost from year-end sale events.

However, several major concerns still remain, including the spread of the Delta variant that could derail the brand’s recovery.

As such, the group highlighted several key areas that it will work on to maintain the brand’s growth.

With the recovery of brick-and-mortar, e-commerce reported a dip in North America and Europe.

To counter this, the company said it would pump more investments into Tarte’s e-commerce business, which is currently operated by Tarte in the US.

Additionally, it is planning to increase the brand’s presence on Tmall by increasing sales activities on the platform.

On the other hand, Kosé said it hopes to increase sales of Tarte in new channels like Target and Kohl’s in the US. It is also planning to increase its footprint in Europe by opening more doors in the market.

In terms of products, the brand intends to focus on concealer, as well as other core categories like mascara.

Slight increases

In the first half, Kosé Corp net sales dipped slightly by 0.4%, as sales were negatively impacted by the pandemic in and most other markets save China.

Operating profit increased 121% because of the reduction in the cost of sales and cost control measures.

The cosmetics business recorded a sales increase of 4.1% and an operating profit increase of 33.2%.

The growth was attributed to strong sales of Decorté in China, while Albion, Addiction, Sekkisei and Jill Stuart saw sales grow in Japan.

Despite the strong sales in China, as well as the recovery in North America and Europe, Kosé is not expecting total sales to meet its initial forecast by December 2021, especially given the weak performance in its home market.

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