Beauty store chain CJ Olive Young to launch Japan unit

CJ Olive Young Corp., South Korea’s largest beauty store chain, will set up a subsidiary in Japan in the first half of this year to mark its foray into the neighboring country.

Japan is the company's most strategically important overseas market alongside the US. CJ Olive Young will supply its private brand products to local distributors in Japan, the company said on Thursday.

It has not yet decided whether to open a directly managed offline store in the country.

The subsidiary establishment comes after cosmetics sales of CJ Olive Young’s private brands in Japan had shot up 125% on average over the past four years, starting in 2020.

Their first-quarter sales soared 76%, compared with the same period the year prior.

CJ Olive Young said the Japanese have similar consumption tendencies as Koreans and are increasingly interested in K-beauty products.

It set up subsidiaries in the US and China in 2014 and 2018, respectively. However, it had wrapped up its offline business in China after closing all its 10 stores in China due to accumulated losses. In the US, it has not opened a brick-and-mortar store.

It handles overseas orders through its online mall Global Mall, through which it has shipped 20,000 types of products to more than 150 countries, with a focus on its private labels such as BioHeal BOH and WakeMake.

In 2023, sales at CJ Olive Young jumped 39% on-year to 3.9 trillion won ($2.9 billion), driven by a 660% surge in sales to foreign customers.

It expects its own cosmetics brands to ride on the popularity of small and indie brands, a global trend.

Meanwhile, CJ Corp., its holding company, bought back a 22.56% stake in the beauty store chain from Glenwood Private Equity for 790 billion won ($578 million) in March.

The Seoul-based investment firm valued it at 3.5 trillion won, double its earlier projection in 2021, despite its suspended initial public offering.

From the divestment, Glenwood reaped a nearly 30% internal rate of return, or 380 billion won in gains over three years.

Write to Sul-Li Jun at sljun@hankyung.com
Yeonhee Kim edited this article.