Dolce & Gabbana and Shiseido's beauty license partially terminated
Apr 30, 2021
Shiseido and Dolce & Gabbana have partially terminated their beauty license agreement. The move is part of Shiseido’s cost cutting measures after the company saw a decline in sales due to the COVID-19 pandemic.
The changes will be effective beginning December 31 in all markets except France. The move is expected to result in a 321 million dollar loss for the financial year through December, including the impairment of trademark rights according to Nikkei Asia.
Shiseido manufactured and sold Dolce & Gabbana branded perfume and cosmetics under a licensing contract that dates back to 2016. While Shiseido had hoped the deal would be lucrative, it ended up being quite costly for them due to the cost structures and marketing investment that went into the products. Shiseido’s sales of Dolce & Gabbana declined 28 percent last year, more than the 17 percent seen by Shiseido’s Cle de Peau line and the 12 percent decline by the namesake Shiseido brand.
Shiseido has been in turnaround mode and has been selling off brands including Tsubaki hair are. At the same time, the company is also looking at brands that could be seen as profitable. On May 12, the company will discuss how the cancellation of the Dolce & Gabbana contract will impact their finances.