Shiseido Sells Personal Care Business To CVC For $1.5 Billion

Shiseido is selling the personal care portion of its business for $1.5 billion to CVC Asia Pacific Limited, a company blog says.

Citing increased global competition and the uncertain fiscal environment caused by the COVID-19 pandemic, the company said it has decided to focus instead on its cosmetics business, centering on skincare. Shiseido aims to become a leader in the field by 2030, the company said in a press release.

As Shiseido considered how to move forward, the spin-off of the personal care business was determined to be the best route, according to the blog, to help “promote further development of its brands and employees, bolster investment into its growth, resulting in flexible strategies attuned to the mass business segment, nurturing of human resources capable of fast decision-making and value creation, and benefits for its consumers and business partners.”

CVC was the best choice, the blog says, because of its longevity and expertise at company growth. Shiseido will retain a 35 percent stake in ownership in the new company, according to a letter from President Masahiko Uotani.

“The purpose of this transfer is to further grow the Personal Care business, whose business structure is mass marketing and quite different from the Cosmetic business with beauty consultant counseling, by spinning off and establishing a new joint venture independent of Shiseido,” he said.

While the decision was extremely difficult, he said, the company decided it was “best to entrust a partner who highly values our brand’s potential, is committed to providing appropriate marketing investment, and will enable the job satisfaction and growth opportunities of employees.”

The pandemic was not a huge deterrent for makeup sales, which PYMNTS writes saw a 22 percent drop in Q1 of 2020 compared to the previous year, but still had a strong showing overall. The shift came in people moving away from in-person makeup testing to online tutorials.