Shiseido President resigns

The imminent departure of Shiseido's President Hisayaku Suekawa on health grounds at the age of 53 has triggered both a surge in the company's share price on the Tokyo exchange and focused a spotlight on the group's need to restructure. Shinzo Maeda, a former President between 2005 and 20112, has been recalled.

Last month the company lowered its sales forecast for Q1, envisaging a downturn of some 37% in operating earnings and a drop of 28% in net profits. Once again, the poor state of the Japanese domestic market weighed heavily on calculations, given that it still accounts for 56% of sales. Shiseido has also had problems linked to politics in the Chinese market coupled with the slump in Europe.

Earlier, sales in China were expected to increase by some 10% in the current fiscal year but Q3 sales fell off with a downturn of some 20% at the year end. The company is reacting by cutting costs and revamping both R&D and production. The Kamakura plant near Tokyo is scheduled to close in early 2015 and some production, as announced earlier, is being switched to Vietnam. Meanwhile, Shiseido's prospects, despite the firming up of share price, look modest to financial markets.