Shiseido’s Growth Strategy
Although market conditions remained challenging, primarily in makeup, sales of SHISEIDO and Dolce&Gabbana continued to grow. For bareMinerals, we continued to move forward with structural reforms, including the closing of unprofitable boutiques. Additionally, we made efforts to fortify our brand portfolio in such ways as concluding a licensing agreement with Tory Burch, an American lifestyle brand, and acquiring Drunk Elephant, a fast-growing prestige skincare brand centered on the U.S. market.
Overall operating loss was ¥11.4 billion, an improvement of ¥3.4 billion over the previous fiscal year, thanks in part to a reduction in fixed costs associated with the promotion of structural reforms as well as the enhanced marketing efficiency brought about by digitalization.
The Americas Business includes commercial operations, brand holder functions responsible for the development of makeup brands sold globally, and functions pertaining to our Centers of Excellence, which are bases for value creation in terms of makeup, digitalization, and technologies. The Americas Business is also responsible for carrying out strategic investments in these global functions. Commercial-based profit reached high single-digit, and with brand holder costs combined, it moved into the black in fiscal 2019.
In the U.S. market, we will continue to reinforce the makeup brands NARS and Laura Mercier and accelerate the growth of the skincare brands SHISEIDO and Clé de Peau Beauté. For bareMinerals, we will remain committed to pursuing structural reforms while promoting a further shift toward digital.
Additionally, to achieve net sales growth, we will begin the full-scale rollout of Drunk Elephant and Tory Burch, which have significant growth potential as global prestige brands.