Beauty products generated $8.2 bln in 2005

Sales of prestige beauty products hit a new record of $8.2 bln in 2005, growing 4% YTY. Since 2000, sales of prestige beauty products, products sold at US department stores, have grown by over $1 bln. Among the three major categories in the beauty industry, makeup saw the biggest growth with a 6% increase in sales at US department stores, hitting the $3 bln mark in 2005. Fragrance sales rose 3% to $2.94 bln and skincare rose 2% to $2.2 bln in the high-end, prestige category. For the first time sales of cosmetics in prestige department stores, $3 bln, surpassed fragrance sales, $2.94 bln, making it the largest category within the prestige beauty market. Nearly all segments in makeup posted gains, including the top three – face, eye and lip segments. The face segment was up 5%; the eye segment was up 10%; and the lip segment was up 1%. These three segments represent nearly 95% of all cosmetic dollars.

Beauty industry dynamics

  Revenue Growth Share
Makeup 6% 36%
Fragrance 3% 36%
Skincare 2% 27%
Source: NPD