Kao : to Reorganize its Sales Subsidiaries, Newly Establishing Beauty Consulting Companies

2017/06/30

Kao Corporation today announces that it will reorganize its domestic sales subsidiaries relating to the Consumer Product Business, a move that will include the establishment of two companies specializing in beauty. The new organization expects to be operational from January 1, 2018. Details will be decided through proper procedures, such as consultation with the decision-making bodies of each company as well as with the Kanebo Cosmetics labor union.

1. Reorganizing sales subsidiaries in Japan
In order to further improve the corporate group's collective capabilities, expertise, and productivity, the current divisional structure will be reorganized into a functional structure.
Under the new structure, the sales subsidiaries will be reorganized into four companies on the basis of the following three functions:
1. Trade marketing, sales, negotiation with distributors;
2. In-store beauty counseling; and
3. In-store merchandising

2. Combining Kao and Kanebo Cosmetics sales companies into a single company
To further exert its capabilities as a comprehensive manufacturer of consumer products and cosmetics, Kao will have a single company handle its sales.
By further capitalizing on the collective capabilities of the Kao Group and strengthening engagement with distributors, Kao aims to achieve new proposal-based activities that will give more vigor to the market.

3. Establishing new companies specializing in beauty
To more clearly and accurately convey the uniqueness and value of Sofina and Kanebo Cosmetics respectively, Kao will establish two companies; Sofina Beauty Counseling Co., Ltd. and Kanebo Beauty Counseling Co., Ltd., specializing in in-store beauty counseling. The two new companies will construct management systems to further improve expertise in advising customers, strengthening their ability to enhance the brands' appeal.
This is one of the initiatives that will drive the ongoing major reform of the Kao Group's Cosmetics Business.

4. Consolidating the in-store merchandising functions
The functions of creating and maintaining sales areas in stores will be consolidated to raise productivity and improve the ability to offer solutions.

In 2017, Kao embarked on K20, its 4-year Mid-term Plan with the slogan 'Transforming Ourselves to Drive Change.' Through the upcoming sales organizational reform, the company aims to offer new modes of marketing and sales that maximize the assets and expertise of the corporate group, collaborate even more effectively with distributors in the rapidly changing market environment, and address customer preferences and interests with fine-tuned attention.