Estée Lauder’s Investment in Japan Plant Becomes An Issue

Estée Lauder’s decision to invest roughly $1 billion in a new manufacturing plant in Japan to further support Chinese sales may hamper profits as the company reduces production levels. The beauty company built the factory to eventually manufacture about 300 million units a year, but it’s only expected to produce tens of millions of units in 2024. In the September quarter, the company posted about a 20% drop in skin-care sales, mainly driven by China and its travel retail business. Other big companies are confronting a China slump. P&G, owner of Japanese skin care brand SK-II, and Tokyo-based rival Shiseido have seen sales declines in China after consumers turned away from Japanese merchandise after Japan started to release water from the Fukushima Daiichi nuclear plant into the Pacific Ocean.

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