NEW YORK- Prestige beauty manufacturers can take heart: sales of beauty products hit a new record of $8.2 billion at retail last year, growing four percent over 2004 figures.
According to NPD BeautyTrends, cosmetics grew 6 percent in dollars and 36 percent in segment share; fragrance grew 3 percent in dollars and 36 percent in segment share, and 2 percent in skin care and 27 percent in segment share.
Color cosmetics, which generated $3 billion in retail sales in 2005, was the biggest winner, eclipsing fragrance, which generated $2.94 billion in retail sales last year. Showing particular strength: “alternative” and makeup artist brands such as MAC Cosmetics and Bobbi Brown – these types of brands comprised just 3 percent of the prestige makeup category in 1997, and in 2005, they accounted for 29 percent of the sales in this category. Breaking the numbers down still further, the face segment of cosmetics rose 5 percent, the eye segment was up 10 percent and the lip category was up one percent. According to NPD, these three segments together represent nearly 95 percent of all cosmetics dollars spent.
“It’s clear that the brands that are resonating today have a strong brand culture, are experience providers, and are fun and entertaining with an accessible price point,” said John Demsey, global president for the Estée Lauder and MAC Cosmetics brands at the Estée Lauder Cos. “If you look at the scorecard, the best-trained makeup artists, the most directional fashion and color stories and the best products are coming from [makeup artist and alternative] brands.”
For complete coverage, see tomorrow’s WWD.
For Cosmetics, The Sky’s The Limit
Sales of beauty products hit a new record of $8.2 billion at retail last year.
