By  on February 20, 2009

BEVERLY HILLS, Calif. — Cosmetic Executive Women inaugurated the Women in Beauty Series on the West Coast last week with a clear message from Pamela Baxter that the recession has not — and will not — kill the luxury market.

“If you are a luxury brand, you have to stay focused. I don’t think you can go with the winds of the economy,” the president and chief executive officer of LVMH Moët Hennessy Louis Vuitton’s Perfume and Cosmetics Group and Christian Dior Inc.’s U.S. division told 225 people gathered at the Beverly Hilton. “At the end of the day, people do want to dream.”

Baxter singled out Rouge G de Guerlain, a collection of lipsticks retailing for up to $45 and hitting stores globally April 1, as evidence that LVMH beauty brands, including Dior Beauty, Fresh, Givenchy and Acqua di Parma, as well as Guerlain, aren’t straying from the luxury course in the face of economic pressures. Guerlain creative director Olivier Echaudemaison teamed with Place Vendôme jeweler Lorenz Bäumer on the Rouge G packaging.

“If you have got an innovative package and design, I wouldn’t call it ostentatious, I would say you’re getting something that is very unusual and very unique,” she said. “People will still pay the price for that.”

Along with luxury, no one should be writing obituaries for department stores, indicated Baxter, who transitioned from behind a Max Factor counter to eventually become Estée Lauder Cos.’ president of the specialty group worldwide before joining LVMH in 2003. She maintained that department stores are important venues for cosmetics shoppers requiring personal attention.

“We’ve found that some of the younger customers who start with Sephora, as they get older and they want more advice or they want more service, that they do go to shop in the department stores later,” said Baxter. She estimated that the average department store shopper is 48 years old, compared with 55 percent of Sephora shoppers who are under 25 years old.

Still, Baxter’s harshest words during the roughly hour-long session were reserved for specialty stores. She stressed that the price-slashing strategy pursued by Neiman Marcus and Saks Fifth Avenue last holiday season surprised luxury firms and undermined long-term business goals.

“The major issue is that both Neiman Marcus and Saks Fifth Avenue are owned by investment bankers. Investment bankers are not known to build brands. They buy businesses for one reason only — to make money. So, I worry about that,” said Baxter. “I don’t know that it is going to have that big of an impact on cosmetics because so far they have toed the line on cosmetics.”

Even in the tough retail environment, Baxter made the case that upstart beauty brands that take risks and are creative could succeed by highlighting risks key to her career advancements. Shortly after Baxter joined LVMH, for example, she lead an effort to tackle Dior Beauty’s ubiquity in doors that didn’t match its premium positioning by eradicating 30 percent of its distribution. She also ended the brand’s gift-with-purchase program.

For those in Baxter’s audience who wanted her to offer a glance at the future of beauty, she offered up this nugget — time-saving products for busy women for whom every second is precious will become increasingly crucial. “Maybe there will some day be a beautiful lipstick that goes on in one fell swoop and stays on all day and doesn’t dry your lips out,” she said. “Maybe.”

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