So your 401(k) is in the dumper. That's no reason not to look good.
According to market research firm The NPD Group, the U.S. prestige beauty industry -- products sold mainly at U.S. department stores -- is showing signs of stabilizing from a slow start to the year.
The total industry is down one percent for the first half of 2008 vs. 2007, but the declines are not as strong as they were in the first quarter of this year. In fact, the second quarter of 2008 was the strongest quarter in the past three years.
Skincare was the bright spot in the market, the only category showing growth during the first half of the year.
Conversely, in China the prestige beauty industry continues to register double-digit growth in all categories. NPD tracked 6 major cities in both 2007 and 2008 and makeup is seeing the largest growth for the first half of 2008.
Looking at Italy and France the overall prestige beauty industries are holding up, for the first half of 2008. Only the skincare category showed sales decreases.
In the U.S., prestige skincare sales reached $1.2 billion for the first half of the year. It's important to note that first half 2007 sales included an extra week in January causing sales to be slightly inflated that year. Without that additional week in 2007, prestige skincare sales would have shown an even healthier performance.
Premium-priced facial skincare products priced $70.00 and above continued to outpace overall prestige skincare, growing 8 percent with sales of $365.1 million in the first half of 2008.
"As discretionary income becomes more challenged, the fundamentals in skincare like facial moisturizers and anti-aging are currently winning with prestige consumers," said Karen Grant, vice president and global beauty industry expert.
Prestige makeup sales in the U.S. started off sluggish in the first quarter of 2008, but gained momentum in the second half of the year. The second quarter was up three percent, buoyed by a strong April and May, making this quarter the strongest dollar performance over the past three years in the U.S.
Prestige fragrances in the U.S. posted a decline of three percent for the first six months. Women's prestige fragrances declined one percent and men's were down six percent for the first half of 2008. However, fragrances posted a two percent increase during the second quarter vs. the same quarter last year. That growth was driven primarily by women's fragrances, which were up four percent for the second quarter.
"The second quarter performance for women's prestige fragrances in the U.S. is one of the best we have seen for this category in years. In fact, this is the first year that men's fragrances have underperformed the women's market. The increases in women's fragrances are being driven by fragrances that have been on the market more than one year," said Grant.
"The importance of classics cannot be overstated. As important as new fragrances are to the market, we continue to see the appeal of classics. More than half of women who are purchasing for themselves are 'buying a fragrance they once owned', replenishing their favorites," Grant concluded.
