Estee Lauder's Mac Brand Outperforms Japan Cosmetics Market, Demsey Says

Estee Lauder Cos. said sales of its Mac cosmetics in Japan are exceeding those of the wider cosmetics market, as the world’s second-largest economy emerges from its worst postwar recession.

“We’re outpacing the market by five to six points,” Estee Lauder’s Group President John Demsey said in an interview today in Tokyo. He declined to say how the industry did.

Japan’s retail sales rose 4.2 percent in February from a year earlier, the fastest pace in more than a decade, as an export recovery and stimulus spending created jobs. Estee Lauder is expanding in overseas markets, including China and Brazil, where it expects faster growth, it said in February.

“The Asia-Pacific in general is one of the major driving forces of our performance” for this fiscal year, Demsey said.

Estee Lauder gets about 18 percent of its sales from the Asia Pacific region, according to Bloomberg data. The market is the smallest for Estee Lauder, with 47 percent of its revenue coming from the Americas. The New York-based maker’s brands include Clinique and Bobbi Brown.

Mac aims to raise the number of stores in Asia to 163 by June 30 from 156 in February, according to Weber Shandwick, a public relations firm for the cosmetics maker.

Demsey is visiting Tokyo to promote a new lipstick sponsored by singer Lady Gaga under the company’s Viva Glam range, revenue from which goes to the Mac AIDS Fund.

Sales of the Gaga’s pink lipstick, introduced in February, have been three times the company originally expected, Demsey said. Sales from the products “could be higher” than its March estimate of between $4 million and $5 million, he said.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Shunichi Ozasa in Tokyo at sozasa@bloomberg.net.

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