Commentary

The Lipstick Effect: Luxury Beauty Sales Boom, While Total Luxury Spending Falls

It seems there is something especially alluring about a fancy lipstick these days: The NPD Group reports that year-to-date dollar sales of prestige cosmetics are up 9% through May, or $1.4 billion. (May sales are up even more, at 11%.)

Those gains, however, make quite a contrast to the luxury market in general. Unity Marketing, which tracks consumer confidence among America's most affluent shoppers, is reporting the steepest quarterly plunge since the recession in it Luxury Consumption Index.

"Consumer confidence among the affluent--the economy's heavy lifter segment which account for only 20% of households, but over 40% of spending--has fallen sharply since the beginning of 2011. Not since the middle of 2009 has it been so low," Pam Danziger, president of Unity Marketing, writes in the report. "If those at the top income levels feel stressed and unwilling to spend, imagine what it says about people living in middle-income households. "

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