Sanrio Co., the Japanese owner of the Hello Kitty character brand, may boost profit after arresting a 10-year slide in sales by slapping its logo on wine, wallpaper and minicars.
The popularity of Hello Kitty, a white cat with a red bow and no mouth, with celebrities including Lady Gaga and Paris Hilton, has led the company to focus on licensing and to pare its retail and restaurant businesses (Sanrio intends to shut 40 of its 260 gift shops in Japan over the next three years).
Sanrio almost doubled overseas licenses last year and counts clothing chains Hennes & Mauritz AB and Inditex SA as customers. President Shintaro Tsuji, 82, plans to set up an office in Dubai this month to grow in the Middle East.
An appearance by Hilton, a reality TV player, at Sanrio’s 35th birthday party for Hello Kitty, and by Gaga, a pop singer, on Japanese television holding a stuffed toy, helped the company boost fiscal 2009 sales 0.8 percent from the previous year, the first annual gain since 1999.
“Hello Kitty’s Zen-like calmness and faceless expression are the major reasons for its appeal across age groups and markets,” said Martin Roll, chief executive officer of Singapore-based consulting firm VentureRepublic.
Note that a major part of the strategy is to “expand beyond Europe, North America, and Japan”—in other words, the developed world might have had enough of Hello Kitty, so now it’s time to endear her to the rest of the world. Click through to see Lady Gaga in a Japanese TV appearance, decked out in Hello Kitty everything: