Shiseido makes loss of ¥28.6bn due to low sales of Bare Escentuals


Business operations to be streamlined and stores closed

Japan based cosmetics giant Shiseido Co. has reported its first net loss in eight years. The impairment loss totaled ¥28.6bn on intangible assets or goodwill associated with the Bare Escentuals brand, which the company acquired back in March 2010.

Despite engaging in “concerted efforts” with Bare Escentuals to integrate and strengthen the functions of Shiseido’s manufacturing and logistics bases in the Americas with those of Bare Escentuals, as well as investing substantially in media including TV advertising, the company stated that sales remained “lower than expected”.

As a result, Bare Escentuals will streamline business operations including the strategic closure of selected company-owned stores for the fiscal year 2013. To encourage growth, Bare Escentuals will reinforce its direct-to-customer business such as sales through QVC and infomercial.

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Furthermore, an adjustment was made to the forecast of whole-year consolidated business results for the fiscal year ended March 31, 2013, with net sales predicted to decrease by ¥2.5bn.