Japanese and western slump hits Shiseido profits

Japanese cosmetics group Shiseido has posted an 11.4% decline in net profits to ¥17.8bn (about €131m) for the first six months of 2009-10 (April-September 2009) on sales down 11.7% at ¥17.3bn. Operating earnings declined by 32.9% to ¥22.7bn. The company says the absence of consumers both in Japan and the west on account of the economic crisis has continued to affect performance. Sales of cosmetics outside Japan dropped by 17.5% in the reporting period with good results in China and other Asian countries failing to offset the slump in North America and Europe.

Sales growth in China recovered in Q2 2009 (April-June) and there were some signs of a recovery in cosmetics, especially in skin care and fragrance and in the travel retail business. Negative double-digit growth was registered in this quarter in the Americas though skin care products remained steady. Sales were largely unchanged in Europe compared with the same period of the previous year.

Sales from Shiseido's Japanese company fell by 9% in August on a year-on-year basis. The company reports a continued cooling of consumer confidence coupled with the effect of inventory adjustments and poor weather.

Meanwhile Shiseido International Europe, based in Paris, has signed a joint venture agreement with the Greek cosmetics company Gerolymatos Cosmetics. The Greek enterprise, based in Athens, is part of the Alapis group, a cosmetics importer and seller. The agreement is expected to strengthen sales of cosmetics in Greece. Most sales of prestige products in Greece are sold on a counselling basis and the new JV is expected to enhance the level of service provided by consultants with an emphasis on skin care products.