Following its annual Hot Off the Press industry briefing Tuesday at the Rainbow Room in New York, The NPD Group released a summary showing that the U.S. prestige beauty industry suffered a 3.3 percent decline in dollar sales to $8.4 billion for 2008.
This story first appeared in the January 28, 2009 issue of WWD. Subscribe Today.
Hardest hit was fragrance with a drop of 6 percent, while makeup struggled and skin care was flat, although the antiaging category showed promise, NPD said.
“Fragrance may hold the greatest opportunity for growth,” stated Karen Grant, senior global industry analyst and vice president, Beauty. “The most pressing concerns for the fragrance category are not only the loss of users, but decreasing frequency of usage. It is important that the industry find new ways to engage consumers, especially as they become more independent about their product selection.”
The U.S. was the hardest hit of all the markets surveyed. France slipped by 0.3 percent for the year and Italy stumbled by 0.5 percent — but Mexico jumped by 9.2 percent and China zoomed ahead with a 17.2 percent gain.
Italy and France showed an increase in makeup sales, while skin care sales posted declines in both countries. Fragrance sales were flat in France and Italy.
In the U.S. mass market, business was flat in the food, drug and mass channel. Like in prestige, fragrance sales declined. But the makeup and skin care (excluding hair care) segments grew.