WWD reports that L'Oreal is closing all U.S. operations of Shu Uemura Cosmetics. L'Oreal has owned a controlling interest in the company since 2003.
"This decision is about our desire to focus on growing the larger brands in the Luxury Products portfolio, not because the brand isn't vibrant and beautiful," Carol Hamilton, president of L'Oreal USA's Luxury Division, told WWD Monday. In addition to Shu Uemura, the Luxury Division contains the Lancome, Yves Saint Laurent, Giorgio Armani, Ralph Lauren and Kiehl's brands, as well as a number of fragrance licenses, including Viktor & Rolf and Diesel.
"We love the brand, but it is a very small part of our portfolio," Hamilton said of Shu Uemura. "It's a simple decision after a very complex analysis: we have a very large portfolio, and we want to focus on growing the brands which have a larger presence in the U.S. market."
Shu Uemura will still be sold in 18 countries outside the U.S. 80% of Shu Uemura's sales are from Asia. The brand has several freestanding boutiques in the U.S. which will probably be turned into Kiehl's or Lancome stores. The brand has revenues of around $20 million a year in the U.S., so the closure is going to come as quite a shock to loyal customers. L'Oreal says it is talking with Neiman's, Bergdorf's, Barney's and Nordstrom to work out the details of the closure, which is expected to be final in a few months.