Japan
www.kose.co.jp

Corporate Sales: $3 billion

Beauty Sales: $2.3 billion

Key Personnel: Kazutoshi Kobayashi, president and chief executive officer; Jiro Nakabayashi, senior executive officer; Tadanobu Hayashi, executive officer; Koichi Shinmoto, executive officer; Tomoyuki Nio, executive officer; Takumi Hasegawa, executive officer; Minoru Ushimura, executive officer; Akinobu Hayashi, executive officer; Noboru Matsumoto, executive officer; Shinichi Mochizuki, executive officer; Isao Fujiwara, executive officer; Noriyuki Arai, executive officer; Yoshinori Haratani, executive officer; Masahiro Horita, executive officer; Atsuko Ogura, executive officer.

Major Products/Brands: Skin Care, Cosmetics and Toiletries sold under several brand names in different sectors. High Prestige—Decorte, Jill Stuart, Sekkisei MYV, Infinity, Predia, Addiction, Paul Stuart, Awake, Tarte; Prestige—Sekkisei, One by Kosé, Shirosumi, Hadakiwami, Astablanc, Esprique, Carté Clinity, Crie, Phil Naturant, Formule, Maihada; Cosmetaries—Visée, Fasio, Elsia, Nature & Co, SportsBeauty, Nailholic, Stephen Knoll New York, Rimmel (distribution in China), Softymo, Je l’aime, Clear Turn, Suncut, Kokutousei, Grace One.

New Products: Lechéri skincare products, One by Kosé medicated whitening serum, One by Kosé medicated cream for reducing wrinkles.

Comments: Kosé enjoyed a prosperous fiscal 2019, achieving record highs for net sales and operating profit for the sixth and fifth consecutive years, respectively. Overall sales rose 9.8% to $3 billion thanks to strong sales in Japan and Asia, where 2018 net sales were $2.2 billion and $475 million correspondingly. Overseas sales in North America (+1.6%) and Europe (+13%) comprised nearly 28% of total sales. The company’s operating profit increased 8.3% to $472 million USD, which the company attributed in part to the termination of a licensing agreement for the Rimmel brand.

Kosé’s cosmetics business segment, which account for about three quarters of sales, rose 11% on the record-high sales success of the Cosme Decorte brand. The company’s Albion Co., Ltd. benefitted from a new format for selling products at specialty stores, and sales also increased for the U.S. company Tarte. The ONE BY KOSÉ prestige brand also performed well and turned in an appreciable sales increase in Japan.

Sales in Kosé’s cosmetaries business increased 4.6% to $672 million and operating profit decreased 13.4% to $45 million. Sales were driven by the strong performance of the Suncut sunscreen brand and the Salon Style Bioliss botanical hair care brand of Kosé Cosmeport Corp. Other contributors to sales growth were the Visée makeup brand, the Stephen Knoll New York hair care brand and the Nail Holic nail care brand.

News of Note in 2019: Kosé expects 2019 sales to rise 5.7%, despite Japan’s slow economic recovery and the risks involving foreign exchange rates, global economy uncertainty and the effects of evolving trade policies.

In January, the company cemented a pharmacological skin-care presence by signing an agreement to establish a jointly owned company with Maruho Co., a pharmaceutical company engaged in the research, development, manufacture, import, export and sale of dermatological and medical drugs to patients with skin disorders and diseases. Maruho will be a source of pharmaceutical value as a supplier of high-quality skincare products incorporating the latest advances in the field of dermatology as well as a diverse lineup of dermatology drugs for treating skin diseases. The deal was expected to be finalized in July 2019.

To further meet growing product demand, Kosé announced it would build a new production base, provisionally called Minami Alps Factory. Operation is scheduled to begin in fiscal 2021 and the factory is expected to be environmentally friendly, with a comprehensive quality assurance system that conforms to ISO 22716 Good Manufacturing Practices for Cosmetics.

Looking Ahead: Having already achieved its fiscal net sales target of ¥300 billion (about $2.7 billion) three years ahead of schedule on its Vision 2020 corporate plan, Kosé’s new Vision 2026 plan hinges on a triad of concepts: brand globalization, new product development and exploring new “growth domains,” all in time to mark the 80th anniversary of its founding. The consolidated net sales goal of the new plan is ¥500 billion (about $4.6 billion) plus an operating margin boosted to 16% by 2027. Additional goals include an international sales ratio of 35% and e-commerce/new channel ratio sales to top 15%, with five brands—Decorté, Sekkisei, Jill Stuart, Addiction and Clear Turn—expected to play a large part of the company’s global strategy.