Sunday, September 28, 2008
Cosmetics are pretty resilient
Despite a colorless spending climate, sales of women's cosmetics are looking vibrant.
Sam Dean | The Roanoke Times
Merle Norman co-owner Diane Tuttle (left) helps Gloria Jennings select some cosmetics at the Tanglewood Mall store. Recent market research shows that people are unlikely to forgo purchases of makeup along with other indulgences that can pass for a necessity.
The latest from The Ticker blog
Shopping bags in hand, women hovered over a new cosmetics counter at Macy's in Roanoke, trying on shades of pink and blue eye shadow, peering into mirrors as they applied their favorite lipstick and perching on high black chairs to experiment with different makeup blends.
An excited chatter rose from the counter, located next to the shoe department.
The arrival of the upscale cosmetics line, MAC Cosmetics, means that Nia Llenas won't have to make four-hour trips to Washington, D.C., for her MAC fix.
And she no longer will be sending e-mail orders to her aunt, who used to pick up Llenas' desired MAC products before visiting Roanoke.
Though her budget is tight, Llenas, who lives with her husband and 1-year-old son, said trimming her makeup budget is out of the question.
"I'm super frugal on everything, except for makeup," said Llenas, who is a clinical resource associate at the Jefferson College of Health Sciences.
"I found ways to cut back on other things so that I can have my makeup."
That includes ordering movies on demand, rather than going to the theater. And since moving to Roanoke in February, Llenas and her husband have eaten at restaurants only several times, and those were their "date nights," she said.
Llenas is a microcosm of shoppers who are clinging to certain luxuries, despite a poor economy that has dampened consumer sentiment.
She was one of many who browsed MAC's shiny black counters on its first day open last month, walking away with $150 worth of products.
Most retailers are feeling the impact from consumers scaling back on all discretionary purchases -- except beauty.
People are least likely to forgo cosmetic purchases, along with books, movies and other indulgences that can pass for a necessity, according to a report this year by the NPD Group, a market research firm.
Retailers are taking advantage of beauty-spending shoppers.
National pharmacy retailers CVS and Walgreens are expanding selections of upscale cosmetics with new stores and increased counter space.
In the Roanoke Valley, sales of makeup and skin care products are experiencing a lift at some stores, from the introduction of the MAC line at Macy's to successful promotions at other department stores, such as Belk.
A local pampering business, SpaVa Day Spa and Salon, opened its second Roanoke Valley location this month.
To be sure, not all luxury retail is thriving.
High-end retail chains, such as Saks Fifth Avenue, as well as some designer stores, have seen sales slow as wealthy shoppers take a cautionary approach to spending. Some retailers even are delaying spring orders, adopting a wait-and-see attitude because of economic uncertainty.
It's generally true that when apparel sales falter, cosmetics and skin care purchases rise, said Margie Johnson, a Virginia Beach retail consultant.
Consumers will say, "I can't buy a dress, so I can buy nail polish," Johnson said. "It's one of the most resilient areas, and it has a unique staying power ... everyone is seeking the love for beauty."
The numbers prove it.
Global sales for makeup rose about 5 percent to $36.8 billion in 2007, compared with 2006, according to Euromonitor, and reported by Global Cosmetic Industry magazine. The group expects makeup sales to grow 3 percent each year, to more than $40 billion through 2011.
And sales for skin care products globally jumped 7 percent in 2007 to $65 billion. Sales of anti-aging products largely are driving that growth, said Karen Newman, editor-in-chief of Global Cosmetic Industry magazine.
Products, promotions bring in customers
New York-based MAC Cosmetics moved into Macy's at Valley View Mall last month because of demand.
Store manager Trish Burch said shoppers continued to ask for MAC and its $22.50 perfumes and $18 powder blush sets to come to Roanoke. MAC has counter space inside at least five other Macy's stores in Virginia and in other locations nationwide.
"This is a huge win-win for us," Burch said of the cosmetic line's arrival.
While apparel sales may be lackluster at some department stores, that's not evident at the makeup counter.
An August promotion for Clinique at Tanglewood Mall's Belk store generated $90,000, which was 5 percent more than the store planned, said assistant store manager Brian Sparks. Through the special promotion, customers received free Clinique products with a purchase of $27.50.
"People want to smell and look good," Sparks said.
CVS is taking beauty sales seriously. The pharmacy retailer is rolling out two pilot stores, called Beauty 360, which will sell high-end and specialty lines of skin care, cosmetics and fragrance products.
The selection will be different from what already is found on CVS's shelves, said Erin Pensa, a spokeswoman for the company. The retailer has not yet announced the names of the products that will be carried at the new stores, nor the total number of Beauty 360 location that it hopes to open.
Despite a waning consumer spending climate, "our beauty business is still really strong," Pensa said.
"Even in times that are a little more difficult, people are willing to indulge and in these small indulgences, like buying lipstick, that's going to make you feel a little bit better about yourself."
Shari Olsson of Franklin County is an example of this kind of consumer.
The stay-at-home mother has been buying MAC Cosmetic products for 15 years, because the makeup has "great staying power," she said. She's a fan of its eye shadow, Studio Fix, which is a combination of foundation and pressed powder, and its lipstick.
Olsson said she has trimmed her budget in most every area, "but I haven't changed my buying habits with MAC because when I run out of something, I'm pretty loyal to the brand and will replace it."
Economy forcing some women back to work
Still, a poor economy and high gasoline prices may be driving some cosmetic sales.
Mail orders have doubled in the last year for the owners of two Merle Norman stores in the Roanoke Valley.
Receiving makeup by mail saves time and gas for some customers, said Diane Tuttle, co-owner of the stores, which have locations at Tanglewood Mall and at Ridgewood Farm, a Salem retail center. She calculated that mailing a package of makeup and skin care products weighing less than 2 pounds equals $4.80.
"That's a gallon and a half of gas," Tuttle said.
Orders also have increased at these Roanoke Valley outlets because Merle Norman stores in Lexington and Christiansburg have closed.
The economy also is forcing some women to return to work.
Tuttle said several of these women have shopped Merle Norman's shelves of $14 cleansing cream and $13 lip gloss as they prepare to enter the working world.
"They need makeup to look professional," she said.
Still, even as cosmetics sales are steady at Belk at Tanglewood Mall, there have been signals of a slowdown in other departments, such as men's clothing. When discretionary money is scarce, men don't buy as much underwear and as many pairs of socks, Sparks said.
He attributed that trend to slower-than-expected sales last month during a 25 percent off promotion for men's Jockey underwear and Gold Toe socks.
These kinds of purchases likely are not "a necessity," Sparks said.
The Associated Press contributed to this report.
