The NPD Group, Inc., a market research company, reports first half (January thru June) 2009 retail sales of U.S. prestige beauty industry equaled $3.7 billion, an overall dollar decline of 7% versus first half 2008. June 2009 brought the 11th consecutive month of negative prestige beauty performance. Fragrance, makeup and skin care contributed to the dollar decline. While sales struggled overall, there were some positives in each category.

“The results in first half 2009 are in many ways a continuation, and perhaps, an escalation of the trends we have been seeing since the start of the 2008 recessionary period,” said Karen Grant, vice president and global industry analyst, The NPD Group. “As consumers continue to hold tight onto their wallets, the criteria of what products they choose to spend on is increasingly driven by those that they find personally meaningful and worthy of investment. In this challenging retail environment, it can not be overstated how increasingly important it is for manufacturers and retailers to take careful note that there are items that are resonating well with consumers. They need to understand what those products are and see how they can potentially leverage that learning into winning with other beauty categories.”


Prestige fragrances in the U.S. posted the steepest loss in first half 2009, declining 10% in dollars versus first half 2008. Women’s and men’s prestige fragrances both posted 10% declines from a year ago.

New fragrance launch sales generated $57 million in first half 2009, but dropped 17% from the prior year, due to the decline in women’s new launch activity (31%) when compared to the performance of 2008 launches. On the other hand, men’s new launch activity was up 23%.

In addition to the uptick in men’s launch volume, premium price fragrance juices (prestige fragrances priced at $100 and above) rose 9% in dollars and 6% in units.

Fragrance juices priced just under the premium price point ($75 to $99) also posted an increase, up 2% in dollars and 1% in units. These two components of the prestige fragrance category in first half 2009 continue to capture share of the market and account for almost 30% of prestige fragrance sales.

U.S. prestige skin care dollar sales declined 6% to $1.2 billion in first half 2009. Despite this being the worst first half for skin care in the past three years, the category had the softest losses of all beauty categories in terms of both dollars and units.

Set & Kits and Hair were the only segments to show positive dollar growth in first half 2009 with Set & Kits up 8% in dollars. Hair, although modest, had an increase of 1% in dollars.

And while overall new launch dollar volume declined by 4% (with help from a drop-off in new eye product sales) there was an increase in new facial moisturizer sales. This category, which accounted for almost one-fourth of new product sales in first half 2009, posted a dollar increase of 2%.

Makeup sales in U.S. department stores during the first 6 months of 2009 were $1.5 billion, down 7% in dollars versus first half 2008. Overall segment performance was disappointing in the first six months of 2009. All segments (Face, Eye, Lip, Gift Sets, Other Color, and Nail) posted declines ranging from 3-20%.