Japanese cosmetics giant Shiseido sees 2022 as a ‘turning point’ in tourism sales
By Ritsuko Shimizu and Rocky Swift
TOKYO, October 15 (Reuters) – The CEO of Japanese cosmetics giant Shiseido Co 4911.T estimates that inbound tourism will return next year as the pandemic subsides, starting a gradual recovery in sales of high-end products to travelers.
Stopping tourism amid the COVID-19 pandemic has cut sales to Chinese visitors, a critical segment in recent years. China could start easing travel restrictions after hosting the Winter Games in Beijing, and a reciprocal opening to Japan would trigger a “welcome return” from tourist buyers, said managing director Masahiko Uotani.
“Next summer will be a turning point,” he said in an interview with Reuters.
Like other companies in the luxury sector, Shiseido has been hit hard by lockdowns related to COVID-19 that have closed department stores and airport shops. Operating profit plunged 87% to 15 billion yen ($ 131.7 million) in the year through December 2020. The company expects a partial recovery to 27 billion yen this year. year.
Shiseido aims to achieve 15% operating margin by 2023 and become the world leader in skin care by 2030. To achieve this, the company is divesting some cheaper brands.
In February, it announced the sale of skin care and shampoo brands to private equity firm CVC Capital Partners for 160 billion yen. Shiseido announced in August that it would sell three makeup brands for $ 700 billion to US investor Advent International.
“When we came up with the plan last year, no one thought the corona situation in Japan would last that long,” Uotani said. “If the economic activity in Japan reaches the level of Europe and the United States, I think the cosmetics industry will recover suddenly.”
“What I hope is the spring of next year,” he added.
In mainland China, there are signs of an economic slowdown and fears of tighter regulation, but the market remains an attractive overseas market.
“There is no doubt that the cosmetics industry (in China will also see double-digit growth,” Uotani said.
($ 1 = 113.8700 yen)
(Reporting by Ritsuko Shimizu and Rocky Swift in Tokyo; Editing by Stephen Coates)
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