We were a little surprised to see that high-end Japanese brand Shiseido is making a play for mineral makeup guru Bare Escentuals. It's going to buy the American company for $1.7 billion. Why were we taken aback? Well, you know, Shiseido is a bit lofty, while Bare Escentuals does infomercials. On the surface, this seems like an odd pairing. Shiseido also owns Nars, Carita skincare and Beauté Prestige International (including fragrances from Jean Paul Gaultier and Narciso Rodriguez). Those brands fit a profile that mass market Bare Escentuals does not. However, after further research, we think Shiseido is making the right choice. Here's why: Bare Escentuals is a cash cow and it can get even fatter. The company's sales reached $556 million in 2008, but 85% of those sales were in the US. With Shiseido's deep infrastructure in Asia, Bare Escentuals is bound to blow up there as well. It really was the first big mineral makeup player. While we personally prefer liquid makeup over mineral, it's obviously become a big part of the average American woman's beauty routine, and Bare Essential is recognized as the pioneer. Shiseido can now incorporate Bare's technology into its own line. Shiseido needs to up its US profile. Sure, those of us who work in fashion and beauty know what Shiseido is, but does the random 55-year-old housewife whose favorite beauty brand is Clinique? Probably not. While it definitely shouldn't go down market, being known as, say, "the Chanel Beauté of Japan" by a broad US audience would definitely be a good thing. Right now, just 8% of Shiseido's sales are generated in the US.
We were a little surprised to see that high-end Japanese brand Shiseido is making a play for mineral makeup guru Bare Escentuals. It's going to buy th