Shiseido Co said Friday it is considering selling its personal care products business to European private equity fund CVC Capital Partners in the first half of this year as the Japanese cosmetics maker seeks to focus more on high-end products.
The personal care business includes low-priced shampoo, skincare and body care products, including the TSUBAKI brand, that are also marketed in China and other Asian markets.
Shiseido said it is “currently in discussions” with CVC Asia Pacific Ltd regarding the transfer, confirming an earlier media report, but “no formal decision has been made.” It is considering investing in a company that will operate the transferred business, according to Shiseido.
The personal care segment made up about 10 percent of Shiseido’s total sales in the business year ended December 2019.
The company has faced the need to step up investment for product development and increase advertising to compete with rivals in the personal care segment in recent years, weighing on its profitability.
Cosmetics makers have been hit by the coronavirus pandemic that has led to shop closures and a drop in foreign visitors to Japan due to a sweeping entry ban. Cosmetics are often among major purchases by visitors from countries like China.
For the just-ended business year through Dec 31, Shiseido is projecting a net loss of 30 billion yen ($290 million), a sharp deterioration from a net profit of 73.56 billion yen a year earlier.