Shiseido Co. strengthens its prestige makeup and skin-care presence, adding Laura Mercier and ReVive to its portfolio through an acquisition announced June 2.

The Tokyo-based cosmetics giant intends to put its global infrastructure and extensive resources to work in growing the brands and introducing them to new consumers.

According to the firm's release, they "will benefit from Shiseido’s strong commitment to investing in consumer-facing marketing activities and from sharing the collaborative expertise, skillsets and talent housed within Shiseido’s Global Centers of Excellence for skin care, color cosmetics, and digital and its Americas Innovation Center."

Laura Mercier and ReVive come to Shiseido through its purchase of Gurwitch Products LLC from Alticor Inc., which is also the parent company of [Amway Corp.] Terms of the deal were not disclosed, but Shiseido notes that Gurwitch posted sales of $175m for fiscal 2015.

Gurwitch's two brands both have "unique viewpoints, fast-growing and loyal customer bases and the same focus on innovation that defines all of Shiseido’s brands," the firm says.

According to a June 3 note from Deutsche Bank analysts, Laura Mercier products are sold in 34 countries, mostly through Sephora stores, while ReVive is sold in seven countries. Combined, the brands earned 76% of their sales in the US.

Shiseido currently derives approximately 18% of its overall sales from its business in the Americas. The addition of the brands will help boost its presence in the region while giving the firm opportunity in the long run to grow Laura Mercier and ReVive internationally.

Deutsche Bank analysts do not expect the deal to have a substantial impact on Shiseido's sales initially, given its relatively small size compared with the roughly $7.26bn in net sales the firm booked in fiscal 2015. They estimate that Gurwitch's sales equal 2% to 3% of Shiseido's total sales, and 12% to 13% of its sales in the Americas.

"In our view, the acquisition will provide growth opportunities rather from a mid- to long-term perspective, enhancing its foothold in the fast-growing prestige makeup market," they say.

Laura Mercier is known for its prestige color cosmetics, skin care, and body and bath product lineup, while ReVive products play in the luxury skin-care category. Shiseido sees them as ideal fits with its existing offerings.

"Laura Mercier’s classic French elegance and artistry perfectly complements the unique styles and offerings of NARS, bareMinerals, Shiseido and Clé de Peau Beauté to create a formidable portfolio of prestige makeup," says Marc Rey, president and CEO of Shiseido Americas. "And RéVive, with its proven restorative formulas and use of Nobel prize-winning technologies, is a terrific fit with Shiseido’s skincare heritage."

Candace Matthews, who oversees the Gurwitch Products business and serves as president of the Americas region for Amway, is optimistic about Shiseido's ability to bring Laura Mercier and ReVive to a greater international audience.

"Shiseido has the tools and expertise to help these brands continue to thrive, and shares Gurwitch's unwavering dedication to empowering customers and celebrating individual beauty," she says.

Innovation Center Expansion

Meanwhile, Shiseido recently expanded and updated its Americas Innovation Center in East Windsor, N.J., enlarging it from 6,600 square feet to 20,000 square feet to help support consumer research and product development in the region.

"The Americas Innovation Center will help facilitate deeper customer insights and unparalleled innovation in the Americas, which will in turn enhance product research, technology and development on a global scale," says Rey.

The renovated center will collaborate with the firm's Global Makeup Center of Excellence in New York and house functions previously based solely in Japan, including product safety assurance and intellectual property management.

Former [Coty Inc.] executive Jill Scalamandre will head up the newly launched Center of Excellence, overseeing projects to "enhance and invigorate" Shiseido's color-cosmetics innovation across the company’s prestige brands.

L'Oreal S.A. and the Estee Lauder CompaniesInc. similarly are focused on makeup amid the current worldwide boom ([A#02160523003]).

Scalamandre will join Shiseido in July. She was previously chief marketing officer for skin care and senior vice president of philosophy at Coty.

“Jill is a highly respected industry executive with a stellar track record and expertise that will benefit all of our makeup brands," says Rey. “The Makeup Center of Excellence will greatly enhance our consumer insights and will help all of our makeup brands move faster and achieve more."

Shiseido Nabs Laura Mercier, Revive For Stronger Prestige Foothold

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