The U.S. prestige beauty industry struggled in 2009, with all product categories posting declines, according market research released by The NPD Group.

This story first appeared in the March 25, 2010 issue of WWD. Subscribe Today.

Total beauty sales in the channel decreased 6 percent to $8.19 billion compared with 2008.

Fragrance accounted for the steepest decline, with sales down 10 percent to $2.48 billion in both men’s and women’s, despite an increase in average price that reached $64.50 for both genders. But, there were bright spots. Last year, smaller sizes — or one ounce and under — of new items, like Harajuku Lovers Snow Bunnies, as well as different applicators, including Ralph Lauren Romance rollerballs and the sold perfume necklace from Marc Jacobs Daisy, performed well.

The prestige makeup category posted its second year of declines, decreasing 5 percent to $3.16 billion. However, gift sets — new face sets in particular — ticked up 2 percent. Overall, the face segment declined 2 percent, less than the makeup category’s declines, aided by the fact that there were 50 percent more mineral products introduced in 2009, according to NPD.

Prestige skin care sales, which once rose steadily, declined, slipping 4 percent to $2.47 billion. However, skin care was the only beauty category to post growth in the fourth quarter, or October-December period, gaining 2 percent in dollars. NPD credited the growth to basic skin care and items tailored for sensitive skin, which outperformed antiaging for the first time.

“[Last year] was indeed a very challenging year for the beauty industry,” stated Karen Grant, vice president and global industry analyst, NPD. “In 2010, the reality is that business will still be challenging. The other absolute reality is that consumers — as many as three in five women — tell NPD they are buying beauty products because, ‘they make me feel confident’ and ‘even in these tough economic times, I will still buy beauty products because they make me feel better about myself.’” She continued, “As our consumers increasingly seek the best product for the price or the best price for the product, we must continue to stay focused on what will increase our relevance to them.”

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