Shiseido is accelerating restructuring efforts in the US after continued losses at its American subsidiary, with plans to cut about 300 jobs – more than 15 per cent of its 1880-strong US workforce.
For the first half of the year, the Tokyo-based cosmetics giant reported consolidated net profit of $64.5 million, up from $104,000 a year earlier.
However, its US operations, which account for over 10 per cent of sales, posted a core operating loss of $39 million, widening from a $16.9 million loss in the same period last year. Sales in the region fell 10 per cent.
“Profitability in the US has declined, so we have brought forward restructuring,” said CFO Ayako Hirofuji.
The poor US performance stems mainly from its Drunk Elephant brand, which the company acquired in 2019 for about $608 million.
Production issues this year disrupted supply and drove customer attrition, causing US core operating profit to drop 98 per cent last year to 200 million yen.
Losses also extended to Europe, where Drunk Elephant generated a $1.3 million loss in the first half.
To address these setbacks, Shiseido plans to launch new skin care products this fall and aims to return its US business to profitability next year.
Shiseido expects to reduce fixed costs worldwide by $169 million next year and is reviewing procurement and production to offset up to $20 million in potential US tariff impacts.
