Prestige beauty industry hit hardest last year

PORT WASHINGTON, N.Y. The prestige beauty industry struggled in 2008 while the make up and skin care categories in the mass channel experienced growth, according to The NPD Group, a market research company.

The NPD Group presented the findings at its annual "Hot off the Press" event at the Rainbow Room in New York on Wednesday.

According to NPD, the total U.S. prestige beauty industry experienced a decline of 3.3% in dollar sales in 2008 compared with 2007. Of all the categories tracked by the research company, fragrance experienced the biggest decline.

"Conversely, fragrance may hold the greatest opportunity for growth," noted Karen Grant, senior global industry analyst and VP 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."

Fragrance sales in the mass channel (excluding Wal-Mart) also experienced a decline; however, make up and skin care sales in the mass channel experienced growth.

Globally, the prestige beauty industry outpaced U.S. performance in 2008. China experienced ?impressive? sales growth in the fragrance, make up and skin care segments, as did Mexico. Meanwhile, Italy and France saw an increase in make up sales, as skin care sales declined in both countries.

Fragrance sales were flat in France and Italy.