Kazutoshi Kobayashi, president; Michihito Yanai, director, chief executive officer, Kosé America, Inc. and Kosé Brasil Ltd.; Tomoyuki Nio, executive officer, president, Kosé Cosmetics Co. Ltd. (China) and Kosé Cosmetics Sales (China) Co., Ltd.; Takumi Hasegawa, executive officer, general manager of selective brands division; Hiroshi Hotta, senior chief officer, senior executive director of Kosé Cosmeport Corp.
High Prestige—Decorté, 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, Softymo, Je l’aime, Clear Turn, Suncut, Kokutousei, Grace One.
One by Kosé medicated moisturizing serum, Esprique makeup collection, Visée Avant makeup line, Sekkisei MYV.
Comments: 2016 was a good year for Kosé. The company’s 70th anniversary was commemorated with a concurrent sales climb of 9.7%, making 2016 the fourth straight year of record sales thanks to strong sales of high-prestige brand Kosé cosmetics (+10%), mainstay cosmetaries brands (+7.6%) and makeup brands.
Kazutoshi Kobayashi, president & CEO, specifically commended the company’s high-prestige Decorté brand for setting record highs for sales both in Japan and abroad, enhancing its presence as a global brand. Kobayashi also pointed to Kosé’s success in broadening the appeal of Jill Stuart as a lifestyle brand, supported by the opening of stores and pop-up cafés as well as new rollouts into Thailand, China and other Asian markets. Tarte was also spotlighted as having particular success in the U.S.
Regionally, Kosé reported that 21% of its total came by way of international sales. Japan also realized a sales growth of 5.7%, with increased customer interest in makeup and skincare brands like Tarte. Unfortunately, structural reforms in China held Kosé’s Asian growth nearly flat at +1%.
In packaging news, Kosé announced that it had been awarded a rare “3D trademark” for the container that houses its popular Medicated Sekkisei face lotion, which has been sold for over 30 years. In 2016, it tallied more than 50 million cumulative units sold with total brand sales (based on shipments) for the 2015 fiscal year exceeding ¥30 billion.
In contrast with general trademarks which are applied to two-dimensional subjects such as text or designs, 3D trademarks recognize trademark rights on three-dimensional shapes such as containers. The product is housed in a distinctive azure blue, hexagonal bottle the company describes as reminiscent of a “snow crystal.”
Kosé has a number of forward-looking objectives in place to promote future growth. For starters, its Fundamental Research Laboratory is scheduled for completion in 2019. When finished, it will consolidate Kosé’s three research areas to two locations in Oji. In addition to the new lab, the company has affirmed its commitment to new product innovation, paying particular attention to research and development efforts. For example, the company is currently studying induced pluripotent stem cells to learn if they have applications in anti-aging products.
From a corporate vantage point, the company’s medium-term Management Plan 2019 is on track to achieve net sales of ¥310 billion, an operating income margin of 15%, ROA of 17% and ROE of 14% by growing existing businesses and developing new markets by following a plan that promotes flagship global brands (namely Decorté,
Sekkisei, Jill Stuart, Addiction and Clear Turn), accelerates the pace of developing new markets and enhances operational efficiency. One aspect of the plan involved the opening of Maison Decorté, a flagship store for the Decorté brand, in Ginza Six, a large-scale commercial facility that began operation in April 2017. In addition to product sales, the store offers exclusive esthetic treatments featuring the Decorté products, as well as new-concept skincare products.
The company also reorganized its Global Business Division and strengthened its e-commerce channel to expedite “global and borderless growth” for brands like Maihada, Tarte, Jill Stuart and Addiction, both in brick-and-mortar stores and net-based sales capacities.
The company is also well underway in observing the strategies laid out in its Vision2020 growth plan, promoting brands and achieving sustainable performance improvements. As part of strengthening its manufacturing system to prepare for the new growth stage, the company began partial operations at its new Gunma Factory production facility in mid-2017.