Prestige Beauty Sales Stabilize in First Half

Finally, a bit good news for the U.S. beauty industry. The NPD Group, Inc. reports the U.S. prestige beauty industry* is showing signs of stabilizing from a slow start to the year.  The total prestige beauty industry fell 1% 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.  In the , skin care was the bright spot in the market, the only category showing growth during the first half of the year.

Overall, the market fell 1% to $3.88 billion for the first half. Skin care sales rose 2% to $1.2 billion, while makeup sales declined 2% to $1.6 billion and fragrance sales were off 3% to $1billion.

Premium-priced facial skincare products priced $70.00 and above continued to outpace overall prestige skin care, growing 8% with sales of $365.1 million in the first half of 2008. 

Prestige makeup sales in the started off sluggish in the first quarter of 2008, but gained momentum in the second half of the year. The second quarter was up 3%,  buoyed by a strong April and May, making this quarter the strongest dollar performance over the past three years in the  

U.S. prestige fragrance sales fell 3% for the first six months. Women’s prestige fragrances declined 1% and men’s prestige fragrances were down 6% for the first half of 2008. However, fragrances posted a 2% increase during the second quarter vs. the same quarter last year. That growth was driven primarily by women’s fragrances, which were up 4% for the second quarter.

 “The second quarter performance for Women’s prestige fragrances in the 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 Ms. 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,” said Ms. Grant.

 In contrast, in 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 and the overall prestige beauty industries are holding up, for the first half of 2008.  Only the skincare category showed sales decreases.

More info: www.npd.com