• by Sarah Mahoney  @mahoney_sarah, March 25, 2009

Led by a decline in the sales of high-end fragrances, sales of prestige beauty products fell 3% last year, according to a new report from the NPD Group.

The drop in fragrance sales, which have been declining slightly for several years, was steepest at 6%. But the Port Washington, N.Y.-based market research firm says the 3% dip in makeup sales is more surprising. Skincare sales were flat, which means "this is the first year each beauty category truly struggled," reports NPD.

Makeup accounts for about 38% of the category -- or $3.2 billio-- and the decline in sales was the first ever, NPD says, with dollar sales falling 3% and unit sales sliding 6%. Natural products sold the best.

In fragrance -- which accounts for 32%, or $2.68 billion, of the prestige beauty market -- men's products were especially hard-hit, with sales falling 8% and new product launches dropping 20%. Sales of women's scents declined 5%. Gift sets priced from between $60 and $100, however, had broad appeal -- posting double-digit gains for the year in both dollars and units. New women's fragrances sold best -- up 9%, led by new brands like Viva La Juicy and Estee Lauder Sensuous.

For the year, the top five brands were Acqua Di Gio Pour Homme, Beautiful, Coco Mademoiselle, Light Blue, and Chanel No. 5.

Sales of premium skincare products gained an additional share point over the previous year, but sales were flat at $2.4 billion -- about 29% of the category. And as is true in makeup, the natural products performed best, gaining 6% versus the prior year to about $304 billion. Anti-aging and "specialization" products -- those offering benefits like allergy relief or whitening/brightening -- each gained more than 10%.

"The economic realities of 2008 have created fundamental shifts in the behavior of our consumers and the way they approach beauty," the company says in its release. "In 2009, we recognize that while consumption will not stop for prestige beauty, it has changed. It has become and will become more careful, more selective, and more meaningful."