Beauty bucks economic trend

Any­one who ever ques­tioned Leonard Lauder’s Lip­stick Index of 2001 must by now be regret­ting their cyn­i­cism. When the Estée Laud­er chair­man not­ed that as share prices dive, lip­stick sales – like risqué hem­lines – soar, he encap­su­lat­ed a the­o­ry that was to define the econ­o­my of the beau­ty indus­try for the next decade.

In fact, amid the con­tin­u­ing eco­nom­ic tur­moil of 2012, it’s not only lip­stick sales that are beat­ing a glossy red path sky­ward. Thanks to today’s beau­ty-lov­ing con­sumers, foun­da­tions are fly­ing off depart­ment store shelves, BB (blem­ish balm) creams are boom­ing, skin care sales are ris­ing and per­fume bot­tles are jostling for space in our bath­rooms. Even nail van­ish shades come with a wait­ing list these days.

“The beau­ty indus­try has led the way in fur­ther­ing the UK’s links with inter­na­tion­al mar­kets through­out the reces­sion and is like­ly to play a cen­tral role in help­ing us to recov­er from the cri­sis,” says Car­ol Bag­nald, HSBC region­al direc­tor who over­sees a broad spec­trum of con­sumer lifestyle sec­tors.

Accord­ing to Euromon­i­tor, the esti­mat­ed val­ue of the glob­al beau­ty and per­son­al care indus­try cur­rent­ly stands at $426,373.2 mil­lion. And it’s the £6,191-million mass cos­met­ics mar­ket – added to that of the £2,768-million pre­mi­um make up sec­tor – that per­haps reveals most about our spend­ing habits dur­ing a reces­sion. If bank bal­ances are shrink­ing, make-up bags are cer­tain­ly bulging.

A slick of lip­stick or a flick of eye­lin­er helps us escape when there’s lit­tle else to dis­tract us from the eco­nom­ic sit­u­a­tion

The sup­po­si­tion that con­sumers reach for afford­able lux­u­ries dur­ing times of finan­cial cut­backs is noth­ing new. But what is it about cos­met­ics in par­tic­u­lar that makes us pow­er­less to resist?

“Instant grat­i­fi­ca­tion,” says Male­ka Dat­tu, for­mer senior vice pres­i­dent of Estée Lauder’s Ori­gins and founder of inde­pen­dent retail con­sul­tan­cy Meru­maya. “A slick of lip­stick or a flick of eye­lin­er helps us escape, to trans­form our look and feel good about our­selves dur­ing a time when there’s pre­cious lit­tle else to dis­tract us from the eco­nom­ic sit­u­a­tion.”

Offer­ing us an entry point into a design­er lifestyle is also undoubt­ed­ly what lies beneath our seem­ing­ly insa­tiable desire for lip­stick – and, more recent­ly, nail lac­quer and fra­grance too. While Euromon­i­tor has seen a dynam­ic 6.5 per cent growth in the per­fume mar­ket between 2006 and 2011, (the great­est across all beau­ty and per­son­al care sec­tors), The NPD Group reports a 65 per cent increase in sales of nail prod­ucts between 2008 and 2011.

Even if the £1,500 body-shap­ing YSL dress eludes us, a bot­tle of their La Laque Cou­ture nail var­nish or exot­i­cal­ly ori­en­tal scent Opi­um is a good con­so­la­tion.

The skin care mar­ket has expe­ri­enced 5.7 per cent growth between 2006 and 2011 and is now esti­mat­ed to be worth £2,203 mil­lion. Yet if glit­ter­ing coun­ters of cos­met­ics lure the fick­le among us into try­ing new brands, when it comes to skin care, we remain faith­ful, says Ms Dat­tu. “Skin care is a long-term game. We place our trust in the brands we have a long-stand­ing rela­tion­ship with, believ­ing they’ll bring about results in the future,” she says.

As a bath­room sta­ple rather than a feel-good treat, Euromon­i­tor reports that hair care sales have held steady rather than rock­et­ed and, after a strong per­for­mance in the ear­ly reces­sion­ary years, growth in the groom­ing sec­tor has slowed some­what.

Yet it’s per­haps tan­ning prod­ucts that have proven to be the great­est sur­prise. Mar­ket lead­ers St Tropez have seen sales and prof­its increase by 60 per cent in the last five years and now sell one Self Tan Bronz­ing Mousse a minute in the UK.

An ever-broad­en­ing con­sumer demo­graph­ic is also help­ing to dri­ve sales across all sec­tors. Not only are we being intro­duced to prod­ucts in our teens, but an aging pop­u­la­tion also means we’re using them for longer.

In a world of gloomy finan­cial uncer­tain­ty, there is every sign that the future of the beau­ty econ­o­my is as bright as the colours now lin­ger­ing on women’s lips and nails.

Anyone who ever questioned Leonard Lauder’s Lipstick Index of 2001 must by now be regretting their cynicism. When the Estée Lauder chairman noted that as share prices dive, lipstick sales – like risqué hemlines – soar, he encapsulated a theory that was to define the economy of the beauty industry for the next decade.