Prestige skin care and make-up look strong for 2008

By Simon Pitman

- Last updated on GMT

The prestige beauty market continues to out-perform an otherwise
flat market as US consumers rush to treat themselves to expensive
anti-aging creams and metallic effect color make-up.

For the first nine months of 2007 total prestige beauty spend in the US stood at $5.9bn, representing growth of 4 percent compared to the same period in 2006, according to market research experts NPD Group.

Breaking this figure down, make-up accounted for 42 percent of the total sales at $2.5bn and grew by 5 percent, while skin care accounted for 30 percent at $1.8bn and grew by 4 percent and fragrance accounted for 27 percent at $1.6bn, growing by 2 percent.

As ever it is the big stars that are endorsing the leading fragrance brands, as well as sponsoring their own fragrance launches, and skin care is being boosted by sales of technically advanced and high-priced anti-aging skin care formulas.

But in the make-up segment, sales of metallic-effect products are helping to boost figures, a trend that falls in line with the popularity of metallic-effect clothing and accessories.

Indeed, the NPD Group underscores this trend by pointing out of the top twenty luxury beauty products to be launched in the first six months of 2007, six were color make-up products incorporating some sort of metallic element.

Those launches included Lancome's Colove Fever Shine Lipstick, Clinique's Fresh Bloom All Over Color for the face and MAC Moonbathe Eyeshadows in five different shades.

And with the best selling holiday season still to be factored into the full year figures, the research company is predicting that 2007 will go out with a bang and promises to also welcome in a strong start to 2008.

"The positive momentum in the third quarter compared to last year indicates that we could have a decent fourth quarter for the prestige beauty industry," said Karen Grant, senior beauty analyst with NPD "In recent years we have seen that when the third quarter is positive, the fourth quarter is on the of the strongest performing quarters of the year particularly in skincare and make-up," she added.

This accounts for the fact that women tend to pay special to their appearance during the holiday period on account of increased social engagements, and also the fact that luxury beauty products are also popular gifts.

"It is worth noting that during the holidays women buy for themselves just as much as they do for others," Grant said.

Growth in the largest and fastest growing segment - make-up - is being fuelled by eye, color and nail products, together with gift sets.

Grant noted that, while fragrance sales are still expected to be the strongest force during the holiday season, make-up is also proving highly popular, and is expected to be further fuelled by significant growth in gift sets.

Indeed, during the first nine months of 2007, sales of gift sets grew by a significant 37 percent, although it does still only account for 2 percent of the total make-up segment growth.

However, despite the positive trend in luxury beauty products, some US retailers have already said that holiday sales could be the worst in five years, as fears over sub prime mortgages and subsequent home repossessions have hit holiday consumer spend.

Final holiday season retail figures are expected to be published in mid-January.

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