Kanebo Cosmetics Eyes Overseas Growth

Tokyo-based Kanebo Cosmetics Inc., whose acquisition by Kao Corp. was officially completed this week, is eyeing China, Europe and the U.S. as growth markets.

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So what does a turnaround specialist do once he's overhauled a $2 billion cosmetics brand's international distribution strategy?


Yogo, whose career includes business consulting, a turnaround of troubled mobile phone reseller Hikari Tsushin and a managing director's role at the IRCJ, officially stepped down Tuesday as ceo of Kanebo Cosmetics. But, as a parting shot, he mandated an expansion of Kanebo Cosmetics' international business, which now generates about 8 percent of its revenues. In comparison, he noted, competitor Shiseido's international business generates about a quarter of its $5.9 billion in annual sales.

"I have been aggressive in terms of overseas expansion," Yogo contended. Nevertheless, "we should be 50-50 in the next 10 years," he said of Kanebo Cosmetics' domestic-versus-international sales ratio. "In 10 years, China's cosmetics market will be the same size as Japan's."

In addition to gradually expanding its U.S. distribution base this year, Kanebo Cosmetics will embark on a multistep product launch starting next month, called Sensai Silk.

Kanebo Cosmetics' research was able to "pinpoint the first symptoms of aging in the face," according to Yukie Fujita, marketing manager for Kanebo Cosmetics USA Inc. Individuals in their late 20s and early 30s "begin to notice fine lines and sagging," she said. Sensai Silk is designed to "stop" these signs, claimed Fujita.

Sensai Silk's key technology is said to stimulate production of heat shock protein, a naturally occurring material integral to normal protein function in skin cells. HSP is believed to begin diminishing in one's late 20s.

Four products, including Sensai Silk Soothing Cream; 10 Minutes Relaxing Mask; Softening Lotion in Light and Moist versions, and Emulsion in Light, Moist and Super Moist versions, will be launched next month.

Then, in April, Kanebo Cosmetics will introduce Intensive Eye Mask and Essence, followed in June by 10 Seconds Awakening Essence. The items will range in price from $50 to $100.

Industry sources estimate the Sensai Silk range could generate $2 million in first-year retail sales. Deluxe, 9-ml. samples will be used to promote Sensai Silk.

Kanebo Cosmetics' existing Sensai treatment collections, namely Sensai Premier — which features a 1.4-oz. cream for $650 — and Sensai Cellular Performance, generally target an older demographic. Sensai Premier has been "really successful since launch," said Yogo.

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