By  on April 17, 2007

NEW YORK — Makeup is the new queen of the prestige beauty market.

Prestige makeup, which generated $3.1 billion in sales last year — a 3 percent increase in sales volume — is now the largest prestige beauty category for the first time in a decade, according to NPD Group.

Makeup exceeded fragrance sales, which slid 2 percent to $2.9 billion. Skin care sales rose 1 percent to total $2.2 billion last year.

Makeup sales, which accounted for 30 percent of the prestige beauty market in 1997, have increased 66 percent in the past 10 years and accounted for 37 percent of the prestige beauty market last year, NPD noted.

A decade ago, fragrance made up 45 percent of the market, but its market share has slipped; fragrance accounted for 35 percent of the market in 2006.

The hottest areas in makeup were the face and eye categories, according to NPD; face makeup alone grew 3 percent to $1.4 billion. Face makeup accounts for about half of the prestige makeup category.

Eye makeup, which grew by 4 percent to $875 million, represents about a third of the makeup category.

"The latest trend bringing excitement into the face segment is mineral makeup," Karen Grant, senior beauty industry analyst at NPD, said in a statement. "The recent popularity of mineral makeup illustrates that natural ingredients are resonating with consumers and have broad appeal."

NPD attributed the decrease in fragrance sales to slower sales during the holiday season — "when nearly half of all fragrance sales are generated," the firm noted in the statement.

"Eight of the top 10 new prestige fragrances in 2006 were from designers such as Vera Wang Princess and Juicy Couture," NPD stated. "In fact, designers have been adding more incremental dollars to the fragrance category than celebrities have in the last few years. Since 2003, designer brands have grown $115 million in sales, totaling $1.9 billion in 2006, taking the focus away from celebrity scents."

Parlux Third-Quarter Income Triples

NEW YORK — Parlux Fragrances Inc. said net income for the third quarter ended Dec. 31 tripled, to $17.9 million from $6 million in same period a year ago, thanks to a pretax gain of $34.3 million related to its sale of the Perry Ellis fragrance business in December.Earnings per diluted share were 98 cents compared with 28 cents a diluted share during the prior year.

The firm, however, had a net loss from continuing operations of $5.5 million in the third quarter, compared with income of $1.5 million in the year-ago period, due to operating and interest expenses.

Net sales increased 15 percent, to $43.4 million from $37.8 million in the third quarter a year ago.

Parlux, which was facing delisting from the Nasdaq stock exchange due to late financial filings, reported late second-quarter results three weeks ago. The company said Friday it would be up to date with the filing of its 10-Q for Dec. 31.

"With the filing of our Dec. 31, 2006, Form 10-Q, we will be up-to-date in complying with our reporting responsibilities," Neil J. Katz, Parlux's interim chief executive officer, said in a statement. "We are grateful to our shareholders for their patience and look forward to focusing our energies to improve future results."

For the nine months ended Dec. 31, net earnings fell 47.2 percent, to $7.5 million, or 41 cents a diluted share, from $14.2 million, or 79 cents a diluted share, in the same period a year ago due to a share-based charge of $16.2 million related to the firm's June 2006 stock split.

The firm had a net loss from continuing operations of $22.2 million for the nine-month period, compared with a loss of $852,331 in the year-ago period. Sales during the nine-month period increased 36 percent, to $98.8 million from $72.4 million.

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