Beauty Sales: $2.1 Billion

Major Products/Brands: Decorté, Jill Stuart, Sekkisei Miyabi, Sekkisei, One by Kosé, Lechéri, Esprique, Astaluxe by Kose, X-Barrier by Dr. Phil Cosmetics, Acneo by Dr. Phil Cosmetics, Visée, Fasio, Nailholic, Stephen Knoll New York, Tarte.

New Products:

• One by Kosé Wrinkle Double Repair
• Fascio Matsupa mascara
• Haste mascara remover
• Addiction lip balm and lip balm glow tin
• Jill Stuart Airy Stay brow liner
• Mousse brow mascara
• Bloom Nuance brow palette
• Dr. Phil Cosmetics Summer Aging Care
• Moisture Barrier Care and Medicated Moist formula
• Sekkisei Cylcator B
• Medicated Brightening Emulsion and Medicated Brightening Essence
• Moisture Mild White Repair Essence C100 + Perfect Essence
• Stephen Noll New York Moisture Control shampoo and conditioner
• Infinity Innovative Bright Serum

Comments: In his address to shareholders, Kosé President and CEO Kazutoshi Kobayashi, reported that sales in Japan grew across all sales channels, and sales of Tarte products (sold mainly in the United States and Europe) were strong in every region. Businesses in China, however, were plagued by “sluggish consumption due to slow economic recovery in the region, and by the impact of the release of treated wastewater into the ocean from the Fukushima nuclear power plant.”

Furthermore, in Kose’s travel retail market, purchases of merchandise by travel retailers were reduced in South Korea and then in China, which led to a drastic reduction in shipments during the second half of the year. As a result, Kosé’s fiscal 2023 overall net sales and operating profit were both significantly lower than initially forecast.

Kosé’s cosmetics represented 81.3% of overall sales, and toiletries accounted for 18.1%. Albion’s Elégance and Jill Stuart brands gave a boost to the company’s domestic cosmetics sales, which rose 2.3%. Brands like Visée, Make Keep and Kosé Cosmeport’s Clear Turn turned in performances that lifted the Cosmetaries unit by 10.4%. Amenities sales rose 19% thanks to increased demand from hotels and golf clubs.

2023 Highlights:

In August 2023, Kosé announced that its collaborative research with South China Botanical Garden of the Chinese Academy of Sciences, one of the world’s leading botanical research institutes, had resulted in the development of a Magnolia champaca flower extract that enhanced the skin barrier function. They also reported that the fragrance of the flower had also been found to have the effect of “increasing positive feelings.” These findings, they said, would help pioneer research and development into products that address the holistic needs of customers rooted in the concept that wellbeing contributes to helping people to be healthy in both mind and body.

Earlier in 2023, the company Kosé and Niigata University jointly announced the development of a 3D epithelial model that reproduced the human lip area, an achievement that will be used for evaluating the efficacy and safety of cosmetic ingredients and products, making it possible to verify efficacy and safety evaluations of cosmetic ingredients and products on a structure more similar to the actual lip area. The results of the joint research were published online in the scientific journal Histochemistry and Cell Biology in June 2023.

Looking Ahead:

Despite its concern for the fiscal impacts of ongoing global conflicts and global economic activity, Kosé projected year-on-year sales for 2024 to increase 3.9%. In the United States—although the impact of interest rate increases through to 2023 may start to become more evident—Kosé said it expected the labor market and consumer spending to remain stable.

In addition, Kosé expected sales to continue to be challenging in the South Korea market, to recover gradually in China (primarily in travel retail), and to grow steadily in Japan. Strong operating results are also expected at Tarte, where the main markets are the United States and Europe. In terms of capital investment, construction of the Minami Alps Factory is scheduled to begin during the fiscal year and the company plans to invest ¥25.5 billion in total and record depreciation expenses of ¥10.5 billion.

Beauty Sales: $2.2 billion

Major Products/Brands:

• “High Prestige”
  Decorté, JillStuart, Sekkisei Miyabi, Infinity, Predia, Addiction, Awake, tarte, iMPREA
• Prestige
  Sekkisei, One by Kosé, Lechéri, Esprique, Astaluxe, X-Barrier, Acneo, Maihada, Carté HD

“Cosmetaries” (Mass Market)
Visée, Fasio, Nailholic, Make Keep Mist, Stephen Knoll New York, Softymo, Je l’aime, Bioliss, Clear Turn, Suncut, Magnifique, Grace One.

New Products:

• Decorté Liposome Advanced Repair Serum
• Tarte Maracuja Juicy Lip series
• Tarte sculpt tape countour
• Je l’aime Relax nighttime hair care products
• Make Keep Powder, Decorté Eye Glow Serum Skin Shadow

Financial Summary

In 2022, Kosé started to see a gradual recovery from the effects of the Covid-19 pandemic in many parts of the world. According to Kosé president & CEO Kazutoshi Kobayashi, demand for travel retail in Asia is on the rebound, and cosmetics markets in the United States are also growing steadily, supported by reliable consumer spending. As a result, Kosé’s sales grew in step with the recovery in market demand.

Net sales for the fiscal year ended December 31, 2022 were $2.2 billion, up 7.5% compared to the prior year. In 2022, although sales in China were affected by the continuation of lockdowns and there was a decline in sales in South Korea, sales were driven by the high prestige brand products sold at department stores and specialty cosmetics stores in Japan; and Tarte, which sells products mainly in the U.S. and Europe.

In the cosmetics business, sales in the high prestige category remained strong for Decorté and Albion products in Japan, but sales were sluggish in China, except the travel retail sector and South Korea.

Sales of Jill Stuart and Addiction products increased along with the recovering demand in the makeup market in Japan. At Tarte, sales of major products and new products were both higher in the U.S. and Europe due to successful promotion on SNS.

Sales of Sekkisei, one of Kosé’s major prestige brands, were recovering from the second half of 2022. As a result, sales in the cosmetics business increased 7.9% from 2021 to $1.8 billion.

In the cosmetaries business, sales of Bioliss, a haircare brand, were sluggish. However, sales of Clear Turn, makeup brand Visée and haircare brand Stephen Knoll New York increased. As a result, sales in the cosmetaries business increased 6.2% from 2021 to $396 million.

2022/2023 Highlights

As a medium-to-long-term initiative, fiscal 2022 was also the first year of Vision 2026 Phase II, which aims to “increase Kosé’s global presence and improve the customer experience.”

During the year, Kosé reorganized its “Mission, Vision, and Values,” and defined the Kosé Beauty Partnership as “a representation of the values that it has nurtured since it was founded and its mutually beneficial relationships with stakeholders.”

In addition, the company defined the 3 Gs (“Global,” “Gender” and “Generation”) as themes to pursue in terms of strengthening its ongoing efforts to build a new customer base; while enhancing the customer experience it has been rethinking its activities from a well-being perspective, not just in the conventional area of beauty.

Looking at its progress toward the performance targets for Vision 2026, Kosé made headway in terms of its overseas sales ratio and in building a portfolio of new sales channels including e-commerce and travel retail. On the other hand, the company acknowledged that it has underperformed in its progress toward the targets it established for net sales and profit margin.

“Our most important goal for Vision 2026 is to evolve into ‘a company with ultimately high loyalty’ and to become a company with a global presence. In fiscal 2023, we will build on the groundwork we have laid by ramping up our marketing investments and continuing our growth toward fiscal 2026, the plan’s final year,” Kobayashi said.

In January 2023, Kosé developed a new skincare range—Aman Essential Skin. The range is focused on damage caused by external environmental factors such as UV rays and dryness, and includes facial and body care treatments. Formulas include ancient purple rice bran extract and indigo extract—two plant ingredients that have long been treasured in Japan.

In March 2023, Kosé tapped Japanese professional baseball player Shohei Ohtani as its newest global ambassador. Ohtani has been featured in Kosé’s advertising campaigns throughout the U.S. during the baseball season, promoting the company’s popular skincare products such as lotion and sun care from its brands Decorté and Sekkisei. The campaigns not only focus on healthy-looking skin but also on promoting healthy lifestyles.

In June 2023, Kosé developed in collaborative research with Professor Kenji Izumi and his colleagues at Niigata University Graduate School of Medical and Dental Sciences a three-dimensional epithelial model that reproduces the human lip area from the oral mucosa to the lips and surrounding skin, using cell culture. This will make it possible to verify the efficacy and safety evaluations of cosmetic ingredients and products on a structure more similar to the actual lip area, which has been limited until now to verification using standard skin and oral mucosa in vitro models.

Looking Ahead

For the first quarter of 2023, net sales grew 15.5% year over year to $505 million, fueled mainly by Japan and Tarte, which offset sluggish sales in China and South Korea.

In Japan, Kosé plans to maintain the strong performance of high-prestige brands and drive sales by strengthening measures in the drugstore channel to capture increased demand in the market. In Greater China, including duty-free, the company expects economic activity to normalize in the future, but believes that the negative impact of restrained purchasing of merchandise by travel retailers will linger in travel retail in South Korea.

While Kosé will keep its eyes on Europe and the U.S. until the year-end sales season, which is largely influenced by economic trends, it says it will continue to invest in aggressive marketing activities for Tarte and in expanding recognition for the Kosé brand.

Beauty Sales: $2 billion

Major Products:

• High Prestige—Decorté, JillStuart, Sekkisei Myabi, Infinity, Predia, Addiction, Awake, tarte, iMPREA
• Prestige—Sekkisei, One by Kosé, Lechéri, Esprique, Astaluxe, X-Barrier, Acneo, Maihada, Carté HD
• Cosmetaries—Visée, Fasio, Nailholic, Make Keep Mist, Stephen Knoll New York, softymo, Je l’aime, Bioliss, Clear Turn, Suncut, Magnifique, Grace One.

New Products: RECiPIO skincare, Liposome Advanced Repair Serum, Magnifique genderless makeup, CoenRich Medica Rich Medicated Hand Milk, Rouge Decorté, Esprique Syncrofit Pact UV, Esprique Comfort Makeup Cream.

Financial Summary:

In the nine-month transitional fiscal year that ended December 2021, net sales increased 4.8% to $2 billion as difficulties created by the pandemic slowly declined and there were signs of an economic recovery.

In the Japanese cosmetics market, sales recovered slowly late in 2021 despite the declining interest in buying cosmetics among Japanese consumers because of the need to limit outings during the pandemic. In China, sales of cosmetics were negatively affected by restrictions on travel and outings due to the pandemic. However, cosmetics sales in China were generally higher, primarily in the e-commerce and travel retail categories. In other Asian countries, the decline in cosmetics sales ended even though market conditions remain challenging because of the pandemic. In the U.S., Kosé says cosmetics sales are recovering steadily despite disruptions in some supply chains.

Sales of Decorté products in the high-prestige brand category remained strong in China and Japan, and there were higher sales in Japan of Albion, the Addiction line of makeup products and Jill Stuart cosmetics. Kao-owned tarte products also performed well in North America and Europe but sales of other major brands were sluggish.

Sales of Stephen Knoll New York hair care products and the Suncut, softymo and Clear Turn brands of Kosé Cosmeport Corp. increased. Sales of hair care brands recovered because of limited-time-only promotions and other activities. However, sales of makeup brands were lackluster throughout the year despite a recovery beginning in October. As a result, sales in the cosmetaries business decreased 5.8% to $298.4 million.

2021/2022 Highlights:

Kosé partially revised its medium-to-long-term VISION 2026 (its overarching sustainability plan) in 2021.

“We have left the numerical targets for VISION 2026 unchanged, since there seems little to be gained by making revisions while the business environment remains unclear. Our aim in pursing VISION 2026 is to evolve into a company with a global presence, and our vision is to become ‘a company with ultimately high loyalty,’” explains Kosé president and CEO Kazutoshi Kobayashi. “We will continue creating sustainable and adaptable products and services by taking a global perspective, contributing to a brighter society by making people happy through the power of a cosmetics culture and beauty. In working to achieve this vision, I believe we will win the support of all stakeholders, enabling us to evolve into a company with a global presence.”

In October 2021, Kosé and Kao embarked on a comprehensive collaboration in the cosmetics sustainability domain, with the aim of realizing a sustainable society. Both parties will pool their strengths to collaborate in a wide range of fields, including people, society, and the environment, to identify solutions in the cosmetics business that can contribute to the realization of a sustainable society. In February 2022, they started a collaboration between Kao’s Horizontal Recycling of Cosmetic Plastic Bottles and Kosé’s cooperative venture, Recycling Cosmetics into Paints Initiative. Going forward, both companies that have been respectively promoting these initiatives will work together to promote and develop them while making use of each other’s knowledge.

In December 2021, Kosé was placed on CDP’s climate change A list for the second consecutive year. CDP is an international nonprofit organization that conducts a survey on actions to address climate change to evaluate climate change-related initiatives and information disclosure. Only the companies scoring the highest are included in the A List.

During the first half of 2022, Kosé continued to make progress with activities based on the VISION 2026 medium to long-term vision. In 2022, these activities advanced to Phase II: Increase Kosé’s global presence and improve the customer experience.

Looking Ahead:

In the first half of 2022, sales and earnings were higher than one year earlier despite the significant negative impact of lockdowns in China. Performance was supported by strong sales of high-prestige products in Japan at cosmetics stores and department stores and the growth of sales at Tarte Inc., which sells products in the U.S. First half sales increased 4.4% to $957.6 million.

Although the outlook for the Japanese economy is uncertain, the economy is expected to recover slowly. In China, consumer spending is expected to be sluggish because of the country’s zero-COVID policy. In the United States, there are concerns about monetary tightening and inflation that could continue for a long time. Despite these issues, the Chinese and U.S. economies are expected to continue to recover. Based on this outlook, Kosé forecasts net sales of 2.5 billion in fiscal year 2022.

Beauty Sales: $2.7 billion

Major Products: Skin care, cosmetics and toiletries sold under numerous brand names in three main sectors—High Prestige, Prestige and Cosmetaries. High Prestige includes Decorté, Albion, Jill Stuart, Sekkisei MYV, Infinity, Predia, Addiction, Paul Stuart, Awake, tarte. Prestige: One by Kosé, Shirosumi, Esprique, Carté Clinity, Crie, Phil Naturant, Formule, Maihada. Cosmetaries (self-selection): Visée, Fasio, Elsia, Nature & Co, SportsBeauty, Nailholic, Stephen Knoll New York, Softymo, Je l’aime, Clear Turn, Suncut, Kokutousei, Grace One

New Products: Decorté AQ hair care, Decorté fragrance series Kimono, Albion Excia Brightening line, Sekkisei Clear Wellness, tartelette in-bloom clay palette

Comments: The 70-year-old Japanese-based global cosmetics company with lofty sustainability and social justice goals delivered via Beauty, blamed Covid-19 for its double-digit drop in sales, which fell 14.7% last year. While “High Prestige” Decorté sales were strong in China, Albion and Cosmeport sales were severely impacted by a decline in consumer spending in Japan, despite success with sales of non-transferable lipstick and foundation that were resistant to mask wearing.

While lockdowns negatively affected consumer spending last year, and sales and profits decreased in each area of the Kosé Group’s business, Kosé noted that the overall market is slowly recovering. Specifically, in fiscal Q4, Decorté and Albion posted large gains in sales.

In 2020, nearly 60% of sales were within Japan; Asia held 29% and North America 9.5%.

Outside Japan results were mixed. Rapid e-commerce growth in China benefited sales in Asia by more than 27%. However, sales in North America, Europe and other regions fell nearly 27%. But Kosé noted that there were signs of recovery in the U.S. Sales of tarte rose 35%, excluding results in Ulta and Sephora.

In December 2020, Kosé opened a contact-free shopping location—at their flagship Maison Kosé Omotesando store. Here, customers can utilize digital technology as well as experiencing products in person. Auto-dispenser testers and cashless payment methods add to a secure and safe experience.

Looking Ahead

Making progress in sustainability is high on Kosé’s agenda, according to president and CEO Kazutoshi Kobayashi, who commented, “By incorporating a perspective of sustainability in all activities for VISION 2026 [the company’s over-arching sustainability plan], the KOSÉ Group will grow its business as it helps to achieve a sustainable society.”

He is also basing future success on being “a true and honorable company that attracts consumers through its ideals,” saying: “The Kosé Group aims to be a company with exceptional customer loyalty that is known and admired by all, a company that stands apart as highly original and one of a kind. Moreover, we aim to be a company that customers consider irreplaceable, with a high repeat rate and customer retention rate.”

In more concrete terms, the Group plans to conduct unique    manufacturing that addresses changing customer needs, and in fiscal 2021, we are planning large-scale launches of items from multiple brands with different concepts, textures and functions. In addition, for the “clean products” market, where needs are growing mainly in North America and Europe, we have just launched and plan to carefully nurture the Clear Wellness series, which incorporates the concept of sustainability into the Kosé Group’s flagship Sekkisei brand.

Kobayashi also said the company plans to make strategic investments in the Chinese and travel retail markets, expand the presence of global brands, and roll out more counters in travel retail locations.

Beauty Sales: $3 billion

Major Products/Brands:

• Decorte, Jill Stuart, Sekkisei MYV
• Infinity, Predia, Addiction
• Paul Stuart, Awake, Tarte
• Sekkisei, One by Kosé, Shirosumi
• Hadakiwami, Astablanc, Esprique
• Carté Clinity, Crie, Phil Naturant
• Formule, Maihada, Visée
• Fasio, Elsia, Nature & Co
• SportsBeauty, Nailholic, Stephen Knoll New York
• Softymo, Je l’aime, Clear Turn
• Suncut, Kokutousei, Grace One

New Products:

• Decorté Comfort Day Mist Set & Protect
• AQ Lotion and AQ Emulsion Brightening
• Jill Stuart Moonlit Dew lip color
• Sekkisei MYV lotion
• emulsion and cream

Comments: Overall, Kosé’s 2019 sales declined 1.6% and its cosmetics sales declined 1.2%.

Regionally, Japan sales fell 7.3% due to the Covid-19 pandemic and other factors. In the cosmetics business, sales of Decorté, Infinity and Sekkisei Miyabi in the high-prestige category grew, but sales for Albion Co. Ltd. and Tarte Inc. experienced a downturn. In the cosmetaries business, despite strong performance by Stephen Knoll New York, the Bioliss hair care brand from Kosé Cosmeport Corp. and the Grace One aging care brand and other products, growth was negative due to a decline in inbound sales of Clear Turn and the impact of Kosé ending its licensing agreement for Rimmel.

Kosé pledged to reinforce current operations in Japan and create new value by way of partnerships including “cooperation on skin tone diagnosis” with Panasonic Corporation, a nail printer with Casio Computer Co. Ltd., and collaborations with Maruho Co., Ltd. to provide skin care cosmetics for consumers and with Sunshine Delight, Inc. on a project for UV countermeasures for children.

Elsewhere, Kosé’s Asian region sales grew 25% thanks to the expansion of duty-free stores in South Korea, along with gains in China which came as a result of strong performances turned in by Kosé’s High Prestige brands Decorté and Sekkisei Miyabi.

Sales in North America and other regions declined 1.2%, as gains in Europe were not enough to offset lower U.S. sales. Kosé said despite a prolonged slowdown in the makeup category, Tarte Inc steadily increased its presence in Europe.

2020 Highlights

In the spring, Kosé launched Tarte Sea Hydroconcealer, a vegan, oil-free, fragrance-free, sweatproof and waterproof formula featuring proprietary hydroflex technology that allows the formula to move with skin so it doesn’t cake, crease, or settle into fine lines.

In July, Kosé announced a partnership with Bellus3D, a Silicon Valley technology company to provide sheet masks tailored to each customer’s face using 3D scanning to provide their customers with a uniquely personalized beauty experience.

Kosé’s process captures a 3D scan of the customer’s face at the store, converts it to 2D data, and uses a laser processing machine to cut the sheet mask and provide it to the customer right in the store. The innovation is slated to be offered in Kosé’s Tokyo Maison concept store, which is characterized by state-of-the-art digital technology.

Looking Ahead

Acknowledging that Covid-related issues are poised to impact business for some time, Kosé forecasted net sales of ¥286.6 billion (down from ¥327.7 billion in 2019) for fiscal 2020.

In its forward-looking Vision 2026 statement, Kosé pledged to continue forward with its plan to become a global presence by accelerating globalization of brands, proactively developing unique products, and exploring new growth domains. The company also committed to stepping up its efforts in the areas of digitalization, diversity and inclusion, and sustainability, and reset its target overseas sales ratio from the previous 35% or more to 50% or more and target its e-commerce/travel retail sales ratio from 15% or more to 25% or more.

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Corporate Sales: $3 billion
Beauty Sales: $2.3 billion

Major Products/Brands:
Skin Care, Cosmetics and Toiletries sold under several brand names in different sectors, including:

• Decorte, Jill Stuart, Sekkisei MYV
• Infinity, Predia, Addiction
• Paul Stuart, Awake, Tarte
• Sekkisei, One by Kosé, Shirosumi
• Hadakiwami, Astablanc, Esprique
• Carté Clinity, Crie, Phil Naturant
• Formule, Maihada, Visée
• Fasio, Elsia, Nature & Co
• SportsBeauty, Nailholic, Stephen Knoll New York
• Rimmel (distribution in China), Softymo, Je l’aime
• Clear Turn, Suncut, Kokutousei, Grace One

New Products

• Lechéri skincare products
• One by Kosé medicated whitening serum
• One by Kosé medicated cream for reducing wrinkles

Comments: Kosé enjoyed a prosperous fiscal 2019, achieving record highs for net sales and operating profit for the sixth and fifth consecutive years, respectively. Overall sales rose 9.8% to $3 billion thanks to strong sales in Japan and Asia, where 2018 net sales were $2.2 billion and $475 million correspondingly. Overseas sales in North America (+1.6%) and Europe (+13%) comprised nearly 28% of total sales. The company’s operating profit increased 8.3% to $472 million USD, which the company attributed in part to the termination of a licensing agreement for the Rimmel brand.

Kosé’s cosmetics business segment, which account for about three quarters of sales, rose 11% on the record-high sales success of the Cosme Decorte brand. The company’s Albion Co., Ltd. benefitted from a new format for selling products at specialty stores, and sales also increased for the U.S. company Tarte. The ONE BY KOSÉ prestige brand also performed well and turned in an appreciable sales increase in Japan.

Sales in Kosé’s cosmetaries business increased 4.6% to $672 million and operating profit decreased 13.4% to $45 million. Sales were driven by the strong performance of the Suncut sunscreen brand and the Salon Style Bioliss botanical hair care brand of Kosé Cosmeport Corp. Other contributors to sales growth were the Visée makeup brand, the Stephen Knoll New York hair care brand and the Nail Holic nail care brand.

News of Note in 2019

Kosé expects 2019 sales to rise 5.7%, despite Japan’s slow economic recovery and the risks involving foreign exchange rates, global economy uncertainty and the effects of evolving trade policies.

In January, the company cemented a pharmacological skin-care presence by signing an agreement to establish a jointly owned company with Maruho Co., a pharmaceutical company engaged in the research, development, manufacture, import, export and sale of dermatological and medical drugs to patients with skin disorders and diseases. Maruho will be a source of pharmaceutical value as a supplier of high-quality skincare products incorporating the latest advances in the field of dermatology as well as a diverse lineup of dermatology drugs for treating skin diseases. The deal was expected to be finalized in July 2019.

To further meet growing product demand, Kosé announced it would build a new production base, provisionally called Minami Alps Factory. Operation is scheduled to begin in fiscal 2021 and the factory is expected to be environmentally friendly, with a comprehensive quality assurance system that conforms to ISO 22716 Good Manufacturing Practices for Cosmetics.

Looking Ahead

Having already achieved its fiscal net sales target of ¥300 billion (about $2.7 billion) three years ahead of schedule on its Vision 2020 corporate plan, Kosé’s new Vision 2026 plan hinges on a triad of concepts: brand globalization, new product development and exploring new “growth domains,” all in time to mark the 80th anniversary of its founding. The consolidated net sales goal of the new plan is ¥500 billion (about $4.6 billion) plus an operating margin boosted to 16% by 2027. Additional goals include an international sales ratio of 35% and e-commerce/new channel ratio sales to top 15%, with five brands—Decorté, Sekkisei, Jill Stuart, Addiction and Clear Turn—expected to play a large part of the company’s global strategy.

Corporate Sales: $2.3 billion
Beauty Sales: $1.7 billion (FY 2017 Beauty Sales: $2.3 billion)

Major Products/Brands:

• Decorté, Decorté AQ, Jill Stuart, Sekkisei, Infinity,
• Sekkisei MYV, Addiction, Prédia, Paul Stuart, Awake,
• tarte, Anna Sui, Paul & Joe, Elegance Paris, In Fiore;
• One by Kosé, Shirosumi, Hadakiwami, Astablanc, Esprique,
• Carté Clinity, Crie, Phil Naturant, Formule, Maihada; Visée,
• Fasio, Elsia, Nature & Co, SportsBeauty, Nailholic,
• Stephen Knoll New York, Rimmel, Softymo, Je l’aime, Clear Turn,
• Suncut, Kokutousei and Grace One skin care, cosmetics and toiletries

New Products:

• AQ skin care products
• AQ Meliority Intensive Cream
• Sekkisei powder foundation
• One by Kosé whitening serum
• Bioliss hair care products
• One by Kosé The Wrinkless
• Cosme Decorte base makeup products
• iP.Shot Advanced wrinkle reducer
• Visee Lishe eye color palette
• tarte pineapple of my eye collector’s set

Kosé – Sales, Manufacturing, & More 

Kosé enjoyed a profitable fiscal year. Sales and operating profits set a new record. Corporate sales were up almost 14%, and cosmetics brands proved to be the big moneymakers: Sales of cosmetics jumped 15% and represented more than 75% of the company’s total sales.

Regionally, domestic sales in Japan, which accounted for roughly 25% of the company’s total sales, grew 8%, while international sales rose nearly 37% with solid growth in China and South Korea. tarte gave Kosé’s North American market sales a tidy, 38% boost, with the number of stores selling tarte increasing to 2,500.

Kosé focused a good deal of its 2017 attention to expanding the overseas focus of its brands. After introducing its cosmetics to Italy in 2012, last year the company debuted its Decorté brand in high-end department stores in North America, while at the same time, expanding sales in European and American markets. The company also opened its first flagship store, Maison Decorté, in Tokyo Ginza Six in April. What’s more, Kosé broadened the availability of its Addiction makeup brand and marked the occasion by expanding the number of foundation colors to better meet the needs of global consumers.

In March, Kosé opened Gunma Factory, a new “mother” manufacturing facility tasked with producing the company’s “highly value-added” products. In July Kosé also established Kosé R&D France, the company’s first European R&D facility, located in Lyon, France. The Lyon branch will concentrate on dermatological technology.

Also, in July, Kosé became a member of the UN Global Compact to affirm its commitment to environmental sustainability. The company has long participated in environmental initiatives. For instance, in 2017 its Sekkisei brand conducted its ninth “Save the Blue” campaign. Nine limited-edition products were launched in Japan, China, Thailand, Singapore and Malaysia. A portion of the product sales are donated to fund coral cultivation activities in Okinawa. According to the company, the coral grown is equivalent to the total surface area of the bottom of the product containers of all eligible Sekkisei products sold during the promotional period. Over the last eight years, the venture has generated the planting of 12,550 coral polyps.

News of Note in 2018

In July, Kosé released a fiscal operational update that confirmed ongoing record-high sales and operating performances for the fifth consecutive year, fueled by big increases in Cosme Decorté sales and consistent growth sales by its Albion Group, and tarte in the U.S.

Kosé said it expected sales to increase by 6.5% this year, driven by a 7.6% cosmetic sales boost. With its Rimmel London license set to expire in October, the company will rely on five key global brands—Decorté, Sekkisei, Jill Stuart, Addiction and Clear Turn—to drive sustained growth worldwide. If all goes according to plan, the company anticipates sales of ¥500 billion (an average annual growth rate of 5.8% or more).

Beauty Sales: $2.3 billion

Major Products/Brands: High Prestige—Decorté, Jill Stuart, Sekkisei MYV, Infinity, Predia, Addiction, Paul Stuart, Awake, Tarte; Prestige—Sekkisei, One by Kosé, Shirosumi, Hadakiwami, Astablanc, Esprique, Carté Clinity, Crie, Phil Naturant, Formule, Maihada; Cosmetaries—Visée, Fasio, Elsia, Nature & Co, SportsBeauty, Nailholic, Stephen Knoll New York, Rimmel, Softymo, Je l’aime, Clear Turn, Suncut, Kokutousei, Grace One.

New Products: One by Kosé medicated moisturizing serum, Esprique makeup collection, Visée Avant makeup line, Sekkisei MYV.

Comments: 2016 was a good year for Kosé. The company’s 70th anniversary was commemorated with a concurrent sales climb of 9.7%, making 2016 the fourth straight year of record sales thanks to strong sales of high-prestige brand Kosé cosmetics (+10%), mainstay cosmetaries brands (+7.6%) and makeup brands.

Kazutoshi Kobayashi, president & CEO, specifically commended the company’s high-prestige Decorté brand for setting record highs for sales both in Japan and abroad, enhancing its presence as a global brand. Kobayashi also pointed to Kosé’s success in broadening the appeal of Jill Stuart as a lifestyle brand, supported by the opening of stores and pop-up cafés as well as new rollouts into Thailand, China and other Asian markets. Tarte was also spotlighted as having particular success in the U.S.

Regionally, Kosé reported that 21% of its total came by way of international sales. Japan also realized a sales growth of 5.7%, with increased customer interest in makeup and skincare brands like Tarte. Unfortunately, structural reforms in China held Kosé’s Asian growth nearly flat at +1%.

In packaging news, Kosé announced that it had been awarded a rare “3D trademark” for the container that houses its popular Medicated Sekkisei face lotion, which has been sold for over 30 years. In 2016, it tallied more than 50 million cumulative units sold with total brand sales (based on shipments) for the 2015 fiscal year exceeding ¥30 billion.

In contrast with general trademarks which are applied to two-dimensional subjects such as text or designs, 3D trademarks recognize trademark rights on three-dimensional shapes such as containers. The product is housed in a distinctive azure blue, hexagonal bottle the company describes as reminiscent of a “snow crystal.”

Looking Ahead

Kosé has a number of forward-looking objectives in place to promote future growth. For starters, its Fundamental Research Laboratory is scheduled for completion in 2019. When finished, it will consolidate Kosé’s three research areas to two locations in Oji. In addition to the new lab, the company has affirmed its commitment to new product innovation, paying particular attention to research and development efforts. For example, the company is currently studying induced pluripotent stem cells to learn if they have applications in anti-aging products.

From a corporate vantage point, the company’s medium-term Management Plan 2019 is on track to achieve net sales of ¥310 billion, an operating income margin of 15%, ROA of 17% and ROE of 14% by growing existing businesses and developing new markets by following a plan that promotes flagship global brands (namely Decorté,

Sekkisei, Jill Stuart, Addiction and Clear Turn), accelerates the pace of developing new markets and enhances operational efficiency. One aspect of the plan involved the opening of Maison Decorté, a flagship store for the Decorté brand, in Ginza Six, a large-scale commercial facility that began operation in April 2017. In addition to product sales, the store offers exclusive esthetic treatments featuring the Decorté products, as well as new-concept skincare products.

The company also reorganized its Global Business Division and strengthened its e-commerce channel to expedite “global and borderless growth” for brands like Maihada, Tarte, Jill Stuart and Addiction, both in brick-and-mortar stores and net-based sales capacities.

The company is also well underway in observing the strategies laid out in its Vision2020 growth plan, promoting brands and achieving sustainable performance improvements. As part of strengthening its manufacturing system to prepare for the new growth stage, the company began partial operations at its new Gunma Factory production facility in mid-2017.

Beauty Sales: $2.2 billion

Major Products/Brands: Tarte, Jill Stuart, Decorté, Infinity Kosé, Prédia, Addicition, Paul Stuart, Awake, Nailholic, Sekkisei, Shirosumi, Hadakiwami, Astablanc, Esprique, Crie, Phil Naturant, Formule, Maihada, Visée, Fasio, Elsia, Nature & Co, Sports Beauty, Softymo, Je l’aime, Clear Turn, Suncut, Kokutousei, Grace One.

New Products: Spawake Brand, Tarte Showstopper Palette; Decorté—Slim & Firm Concentrate Multi-Action Face Mask, Vi-Fusion Essence Micro-Treatment Fluid Serum; Jill Stuart—Airy Tint Watery CC Cream, Everlasting Silk Powder Foundation, Crystal Bloom Eternal Dazzle; Sekkisei—Sekkisei Clear Facial Soap, Sekkisei Essence Mask, Sekkisei Emulsion.

Comments: Kosé Group’s net sales for fiscal 2015 increased 17.1% year on year to $2.2 billion, setting a record high for the company, for the third consecutive year. Performance was driven by existing businesses, “inbound demand from foreign tourists visiting Japan” and what the company said was a stronger-than-expected performance by U.S. company Tarte, Inc., which was acquired in 2014. Sales outside of Kosé’s native selling territory of Japan accounted for 17.7% of consolidated net sales.

Regarding Tarte, which has a popular following among U.S. beauty mavens, Kosé president and CEO, Kazutoshi Kobayashi, said that in addition to growth at existing Sephora and Ulta chain stores (Tarte’s primary distributors), the number of stores selling Tarte’s products increased steadily with new store openings by both chains. “In the United States, we are also conducting sales via the QVC home shopping television network,” he said. “In addition, we are working to develop an online sales channel that will, among other benefits, expand the sales area of the company’s website from the United States and Canada to other countries in fiscal 2016.”

In April, Kosé made its debut in the Indian cosmetics market with the launch of a completely new skin care brand, Spawake. The seven-product line is mid-priced for sale in supermarkets, but with an ingredient formulation and “premium mass market” appeal aimed to attract discerning, “urban” women in the middle income bracket. “The Indian cosmetics market is growing and mass-produced products account for 95% of the total,” the company said in a press release. “The rapid increase in the middle-income bracket and greater role of women in society in recent years has driven particularly rapid growth in the ‘premium mass market,’ as consumers look for quality and added value in the mass-produced products they buy.”

News of Note in 2016

Kosé celebrated its 70th anniversary in fiscal 2016 and the company is ramping up its plans to replicate the success of its Japanese brands in Europe and North America. Saks Fifth Avenue introduced Kosé’s newly developed Decorté skin care and cosmetics range to North America in February in Toronto, fronted by model Kate Moss, followed by a March launch in Beverly Hills, and an April pop-up shop in New York. The Decorté line originally spanned 14 products and 39 different SKUs including skin cleansing formulations, moisturizing creams, color foundations, concealers and a 4-color lip palette. It has since been expanded with new products.

Looking Ahead

In June, Kosé announced its goal to become the No. 1 “brightening brand” worldwide. The announcement coincided with the introduction of Sekkisei, the company’s popular, 30-year old Asian cosmetic brand, to the U.S. travel retail sector. Sekkisei’s strategic growth plan to improve its brand’s global brightening profile was kicked off with a newly revamped global campaign, “Where Brightening Begins,” which debuted in the U.S. exclusively at T Galleria by DFS in Hawaii.

Beauty Sales: $2 billion

Paul & Joe is one of Kosé’s international brands.

Major Products: High prestige, prestige and and cosmetary skin care, cosmetics and toiletries sold under brand names including Cosme Decorte, Awake, Albion, Sekkisei, Beauté de Kose, Jill Stuart, Sonia Rykiel Paris, Anna Sui, Paul & Joe, Infinity, Grandaine, Crie, Predia, Visée, Esprique, Formule, Precious, Fasio, Nature & Co, Stephen Knoll, Happy Bath Day.

New Products: Sekkesei Deluxe Junkisui Kit, Cosme Decorte White-science Premium White Lift Mask, Paul Stuart Men’s Skin Care, Predia Deep Spa Cold Cream Cleanse, Paul & Joe lipsticks.

Comments: In April 2011, Kosé adopted an aggressive new management plan focused on core brands and e-commerce, creating a site especially for high prestige brands. Outside of Japan, the company is attempting to customize marketing to each country, but focus on their more global brands. Kosé’s goal is to reach close to $2.5 billion in annual sales by 2015.

Annual net sales fell slightly from the year before, to about $2 billion. International sales accounted for 12.7% of total consolidated sales, but the segment fell 1.3% during the year.

Kosé noted that the Japanese economy was severely impacted by the Great East Japan Earthquake that occurred on March 11, 2011, but there was a slow recovery during the second half of the fiscal year.

By product category, Kosé invested in the Cosme Decorte brand and other value-added products sold at stores that provide counseling to customers. There were also effective advertising and sales promotion activities to increase the number of customers, such as giving the Esprique brand a new image.

Anticipating growth in the men’s market, in 2011, Kosé launched the Paul Stuart brand for the men’s prestige cosmetic market. It targets men in their 30s to 50s, and comprises 10 items in categories including fragrance, skincare and hair care. Products are available at specialty cosmetic stores and department stores in Japan. The Stephen Knoll professional hair care brand followed.

For the first quarter ended June 2012, net sales were up 2.6% over the previous year, to about $493 million, with higher sales in both the cosmetics and cosmetaries businesses. In the former, Sekkesei and Esprique did well, while in cosmetaries, there were many new introductions and increased promotional programs.

Beauty Sales:  $2 billion

Major Products/Brands: High-prestige, prestige and self-selection brands serving skin care, cosmetics and toiletries, and sold under a variety of brand names including Anna Sui, Sonia Rykiel Paris, Paul & Joe, Infinity, Prédia, Esprique Precious, Cosme Decorte AQ, Awake, Cosme Decorte, Beauté de Kose, Jill Stuart, Infinity, Grandaine, Crie, Visée, Phil Naturnt, Esprique, Sekkisei, Formule, Fasio, Nature & Co, Stephen Knoll, Happy Bath Day.

New Products: Cosme Decorte Vice & Virtue fragrance, Nature & Co. Cotton Veil, Golden Bath Body Milk, De la Vie hair dye, Fasio makeup, Esprique Mellow Forming Rouge, Predia Body Care, Sea’s Dew White and Moisturizer White, Sekkisui sunscreens and facial masks.

Comments: The Kosé Group was seeing signs of a recovery in consumer spending in the Japanese domestic market, and reaching the end of a three-year improvement plan, when the country was hit hard by the Great East Japan Earthquake of March 11, 2011.

For fiscal 2011, which ended March 31, 2011, the company reported that consumer prices had continued to fall, but that consumer spending had returned in some categories, partially due to government stimulus programs. As expected, the earthquake had a severe impact on the Japanese economy, resulting in a 0.9% decrease in net sales to $2 billion.

Overseas sales after conversion into yen accounted for 12.3% of total consolidated sales, up 1.5 percentage points, as sales were higher in China and other Asian countries.

High prestige and prestige items fared better than self-selection products sold in drug stores and convenience stores. In the cosmetics business, Kosé focused on increasing domestic sales of value-added products sold at stores that provide counseling to customers. For example, new lines were introduced for the Cosme Decorte and Infinity brands. Advertising and sales promotion spending was also increased.

Overseas sales were higher due to efforts to increase the number of specialty cosmetics stores selling Kosé products in China, introductions of new products in several countries, promotional activities and other actions.

Overall, sales in the cosmetics business increased 0.7% to $1.5 billion.

In the cosmetaries business, however, sales decreased 6% to $509 million.

Going forward, Kosé will continue to strengthen its management and focus on its core brands in Japan while aggressively investing overseas and in new businesses with prospects for high growth.
In 2010, Kosé expanded its overall business, by increasing its share of the cosmetics market in Japan and by targeting growing markets. The company succeeded in reducing the number of stores carrying its products to create a more selective network. It also reduced its large number of brands and products, focusing on those with highest potential, including its very upper tier selections, such as Cosme Decorte.

Sales of Sekkisei expanded as Kosé celebrated the brand’s 25th anniversary with a promotional campaign in Japan and overseas.

Kose entered the men’s skin care and cosmetics market in February 2010 when it signed a contract with Coty Inc. to import, manufacture, and sell Adidas products in Japan.

In May 2011. Kosé began Internet sales, choosing to showcase several of its high-prestige brands.

The company is working to expand its brands in Asia, starting with its premier brand Cosme Decorte in China and other Asian countries where the number of wealthy consumers is rising, and through the aggressive launch of the Jill Stuart brand which is popular among young women.

In April, Kosé issued a first-half forecast for the fiscal year ending March 31, 2012 (April 1, 2011—September 30, 2011) of $1 billion.

Beauty Sales: $1.8 billion

Major Products: Prestige and self-selection brands in the categories of skin care, cosmetics and toiletries, and sold under the brand names of Cosme Decorte AQ, Beauté de Kosé, Awake, Jill Stuart, Prédia, Esprique Precious, Visée, Sekkisei, Crie, Phil Naturnt, Stephen Knoll, Sekkisui, Softymo.

New Products: Fasio Mascaliner, Prédia Acne Care Spa Essence, Grandaine Luxage makeup, Shirosumi W whitening serum, Esprique Precious makeup, Sekkisei Sun-Protector, Happy Bath Day hair care products.

Comments: Sales fell 3.1% last year, primarily due to weak consumer spending caused by the poor economy, according to the company. Cosmetics sales fell 4.8%, as Kosé focused on expanding luxury brands distributed through specialty cosmetics stores and department stores. Two highlights were the debut of the Addiction brand of makeup products for sale in department stores and the relaunch of the Cosme Decorte AQ Meliority brand.

Sales of cosmetics increased 2.6%, as Kosé boosted advertising and promotions. Last year, Kosé entered the male cosmetics business, entering into a licensing agreement with Coty Inc. for the manufacturing and distribution of Adidas men’s beauty products in Japan. The company reportedly expects Adidas to generate about $66 million, in annual retail sales by March 2012.

In other Kosé news, the firm’s Jill Stuart beauty license will be expanded to Korea.

As the end of 2010 approaches, Kosé has stepped things up. The company announced it will start TV commercials for Lift Moisture Essence V, and will feature a popular young actress and a recording star to reach their target 40-something audience.

In collaboration with Seven & i Holdings, Kosé will launch new Junkisui products, moisture-rich skin care products that incorporate extracts of oriental plants.

Looking ahead, Kosé management predicts sales will increase 3.4% through March 31, 2011.

Beauty Sales: $1.8 billion

Major Products: Skin care, cosmetics and toiletries sold under the brand names of Cosme Decorte AQ, Beauté de Kosé, Awake, Jill Stuart, Infinity, Prédia, Esprique Precious, Grandaine, Visée, Sekkisei, Crie, Phil Naturnt, Stephen Knoll, Sekkisui, Junkisui, Fasio, Salon Style.

New Products: Addiction by Ayako makeup, Infinity skin care, Sekkisei Supreme skin care, Nature & Co. skin care, Sotyimo Sara-Sara Powder Sheet.

Comments: For the year ended March 31, 2009, Kosé’s sales dropped 1.2% to $1.8 billion. Company officials pointed to lackluster consumer spending caused by the poor economy and the yen’s strength as the reasons for the decline.

Kosé hopes things pick up with its new department store cosmetics brand, Addiction, which was created by makeup artist Ayako Yoshimura. The line, which is targeted at careerdriven, urban women, was unveiled in mid-July at retailer Isetan in Shinjuku, Tokyo, before entering stores in Kobe and Osaka. Kosé has created a dedicated website for the new line at www.addiction-beauty.com.

Recently, Kose president Kazutoshi Kobayashi stated that while the company generated 11% of its sales abroad in fiscal 2008, plans are to boost the figure to 15% or more in fiscal 2010 by expanding in Asia outside Japan. This was upped from its previous target of 12% or more, based on its business plan for the three years through fiscal 2010 and on the sluggishness of the cosmetics market in industrialized nations.

Beauty Sales: $1.6 billion

Products/Brands: Skin care, cosmetics and toiletries under brands such as Beauté de Kosé, Cosme Decorte, Esprique, Grandaine, Prédia, Infinity, Stephen Knoll, Fasio and Rimmel.
New Products: Junkisui skin care.

Comments: Kosé was hit by the slow expansion of the Japanese economy, extensive competition and the high price of crude oil, but corporate earnings improved and consumer spending remained steady. For the year ended March 31, 2008, Kosé recorded sales of $1.6 billion, a 2.2% gain. Overseas sales accounted for about 10% of the total. The company concentrated on its core brands and distribution channels. Cosmetic sales were bolstered by Cosme Decorte, which added a series of makeup and skin care products and Jill Stuart. Sales of its luxury cosmetics line, Albion, were better than expected.

Overseas, Kosé said sales initiatives to raise awareness of the Sekkisei brand, mainly in Asia, were effective. Since June, Kosé has been importing, manufacturing and selling Rimmel in China through a deal with Coty. Kosé will customize products to Chinese tastes, and plans to have 300 Rimmel shops in the country within three years.

In the cosmetaries business, Kosé focused on the self-selection process. Since 2004, Kosé has partnered with Seven-Eleven Japan on the Sekkisei brand, which consists of cosmetic products containing plant extracts. The firm is now selling Junkisui, a new line of skin care, at more than 12,000 of the convenience stores.

In the first quarter ended June 30, net sales decreased 1.4% from the same period last year, to $395 million. While cosmetic sales were up, there was a decline in other areas, including cosmetaries. Kosé focused on increasing sales in Japan at locations with beauty counselors, and concentrated on distributing luxury products in specialty cosmetics and department stores. Sekkisei Supreme was introduced in Japan, and Kosé started selling Jill Stuart products in Taiwan.

The Kosé Group has created a medium term management plan that will end in March 2011 to focus on building “a more powerful base for sustaining growth.” Despite concerns about a pending economic slowdown in Japan, Kosé is forecasting an increase of 1.9% in net sales for the fiscal year ending March 31, 2009.