By EMILY NELSON
Staff Reporter of T
HE WALL
STREET J
OURNAL
Lipstick sales are red hot. So why is no one smiling?
The reason is that women traditionally turn to lipstick when they cut back on life's other luxuries. They see lipstick, which sells for as little as $1.99 at a supermarket to $20-plus at a department store, as a reasonable indulgence and pick-me-up when they feel they can't afford a whole new outfit. "When lipstick sales go up, people don't want to buy dresses," says Leonard Lauder, chairman of Estée Lauder Cos.
Lauder's Leading Lipstick Index tracks lipstick sales across Estée Lauder's many brands, which account for sales of about half of all prestige cosmetics in the U.S. and include Stila, Origins, Bobbi Brown, MAC and Prescriptives. Since the Sept. 11 terrorist attacks, the index is up broadly, says Mr. Lauder. The index also climbed during past recessions, such as in 1990.
MAC factories started running extra shifts to produce more lipstick after Sept. 11. In the past three weeks, sales of MAC lipstick and lip gloss have grown 12% at stores open at least a year, compared with the year earlier.
"It's like getting a haircut. It makes you immediately feel better," says Meredith Foulke, a 21-year-old senior at Auburn University who recently sprung for a sparkly "Sweet Cherry" Clinique Liquid Lipstick, while shopping at Dillard's in Auburn, Ala. This year, she doesn't plan on splurging for a new suede handbag, she says, "but there's always lipstick."
Lipstick sales at mass retailers tracked by Information Resources Inc., the market-research firm, rose 11% from August through October compared with a year ago.
Sales of lipstick at Borghese Cosmetics Inc. are also up 12% since mid-September vs. last year, spurred on by saleswomen wearing T-shirts emblazoned with the American flag and the words, "love, peace and lipstick." Company executives in New York designed the T-shirts after noticing shoppers buying lipsticks and expressing "a sense of defiance that 'they' aren't going to disrupt our lives and take away our simple pleasures," says Georgette Mosbacher, the New York-based company's chief executive.
Deep, bright lipstick shades, with names like "berry," "red glorioso" and "vino divino," are now most popular, while pale, neutral shades aren't selling as well, Ms. Mosbacher says. "This is a case of wanting to brighten up ... [Lipstick] has always made women feel good."
Lipstick, which dates to ancient Egypt along with makeup in general, often reflects women's attitudes. During the 1920s, for example, mass marketing of makeup in the U.S. took off, women got the right to vote, and bright red lipstick was popular.
Other cosmetic items don't tend to benefit from the lipstick effect. The high-margin prestige cosmetics that drive overall sales are rarely discounted; more typically, stores offer free gifts with a purchase. When upscale department store Bergdorf Goodman, part of Neiman Marcus Group Inc., held a sale for selected shoppers last month, it offered 30% off everything except cosmetics.
Indeed, Borghese's Ms. Mosbacher is lowering her overall sales expectations for the year to a 9% to 12% increase, down from 15% before Sept. 11. Estée Lauder also reduced its overall sales expectations, saying its other business, particularly duty-free airport shops, is hurting.
Lipstick sales might be even higher, if not for brands that promise to stay on longer, reducing the need to buy another stick. Top-selling lipsticks include Cover Girl Outlast lipstick and Max Factor Lipfinity, which claim to stay on for eight hours. Both brands are owned by decidedly practical consumer-products maker Procter & Gamble Co.
An ad for Revlon's Absolutely Fabulous lipstick, shot last spring, seems particularly appropriate with its hint of stock market woes and lipstick-as-comfort-food tone. The ad shows a woman in front of what looks like the New York Stock Exchange trading floor, and it reads, "On a bad day, there's always lipstick."
Write to Emily Nelson at emily.nelson@wsj.com