For the six months ending June 30, the firm’s portfolio of high-prestige brands, including brands such as Decorté, Albion, and Tarte, exhibited strong performances.
The cosmetics portfolio reported net sales growth of 6.3% to JPY105.5bn (USD750.6m). Operating profit increased by 51.1% to JPY9.9bn (USD70.4m). The results helped to boost the firm’s overall performance. Its consolidated net sales grew by 4.4% to JPY130.6bn (USD929.1m) while operating profit increased 81.5% to JPY7.2bn (USD51.2m).
Shinichi Mochizuki, director and CFO, noted that the strong performances of its high-prestige brands in Japan, Europe, and the US, helped to mitigate the fall out of China’s COVID-19 lockdowns.
Furthermore, it believes that high prestige performance in Japan will offset the decline of the prestige category, which includes brands such as Sekkisei and ONE by Kosé.
Moving forward, Mochizuki said the company would strive to grow the online and offline presence of its high-prestige brands.
“In high-prestige, we aim to expand our customer base with new Decorté and Infinity products, while Albion aims to achieve steady growth leveraging new products.”
One of its strategies is to strengthen its line-up of make-up products in anticipation of the recovery of the colour cosmetics category.
“Sales of make-up products remained difficult for some time due to the normalisation of wearing face masks as a result of the spread of the coronavirus infection, but with the recent lifting of travel restrictions, sales of makeup products in the high-prestige brand are on the road to recovery,” said President and CEO Kazutoshi Kobayashi.
Kobayashi highlighted eight make-up products from Jill Stuart, Addiction, and Decorté, which were decorated with various awards including WWD Beauty and @cosme cosmetic awards.
“These best cosmetics awards have led to new customer initiatives, and we will continue to leverage our capabilities to develop products that meet the various needs of our customers,” said Kobayashi.
In addition to those, US colour cosmetics brand Tarte, also performed well in the first half, with sales increasing by 23.6% thanks to new launches such as the Maracuja Juicy Lip Plump lipstick.
He added that the recovery of make-up would reinforce the growth of the high-prestige business.
“The strong performance of Decorté, Albion, Jill Stuart and other high-prestige brands was a major reason for sales growth in Japan… We see no problem concerning the sustainability of this sales growth because the make-up market is also recovering.”
Skin care opportunities
At the same time, the company will work to strengthen high-prestige skin care. One of the most important markets for this segment is China and the company said it would leverage the growing presence of Decorté with a new launch.
“A new product, Liposome Advanced Repair Cream, is scheduled to be launched in September. Since the cream category has a large market in China after that of serums, the new product will be an opportunity to increase the number of liposome regular users and expand sales of DECORTÉ's high-end line in China,” said Kobayashi.