Shiseido & Dolce & Gabbana Split: beauty brand for luxury cosmetics
Japanese cosmetics and personal care giant Shiseido Company Limited has announced that it will partially terminate its global licensing agreement with Italian luxury fashion label Dolce & Gabbana (D&G). The licensing agreement would end effective December 31, 2021 for all product categories, activities and markets, except France.
Under the agreement, Shiseido had developed, manufactured, marketed and distributed D&G’s makeup, skin care and fragrance products since October 2016, utilizing significant resources. However, the D&G brand failed to make a mark in mainland China’s booming beauty and grooming market, and the deal’s cost structure undermined Shiseido’s sales. To add to the woes, D&G became embroiled in controversy in 2018 as its #DGLovesChina ad was deemed derogatory to the Chinese people, leading to public outrage and a boycott of its products.
The brand took another hit as the COVID-19 pandemic kept people at home and beauty stores closed for an extended period, derailing demand for luxury beauty and grooming products. Accordingly, 12% of Chinese respondents in a GlobalData 2020 COVID-19 survey said they had stopped buying beauty and grooming products because it was beyond their shopping budget, while another 53% said they had bought products in the low to middle price range. *.
Shiseido estimates that the termination of the license will translate into an extraordinary loss of JPY35 billion ($323 million) in its results for fiscal 2021 ended December 31, 2021. The move is part of Shiseido’s ‘WIN 2023 and Beyond’ strategy to change its business by exiting massive companies. market segments to focus on the prestigious, high-margin skin care segment. Accordingly, in February 2021, the Japanese beauty MNC sold its low-revenue personal care segment to CVC Capital Partners for JPY160 billion (US$1.5 billion). In May 2021, the company also announced the sale of its North American makeup brands Bare Minerals. , Buxom and Laura Mercier.
Beauté Prestige International SAS, the Paris-based subsidiary of Shiseido, which manages the global fragrance division of Shiseido Group EMEA (Europe, Middle East and Africa), and the D&G license will retain the D&G license for the French market and will continue to operate the global continue production and production. distribution of D&G products until January 1, 2022.
“Shiseido and Dolce & Gabbana part ways as Covid-19 takes its toll on luxury cosmetics” was originally created and published by Retail Insight Network, a brand owned by GlobalData.
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