The FINANCIAL -- According to The NPD Group, Inc., one of the leading market research companies, while overall sales of prestige fragrances sold in U.S. department stores have declined, premium price fragrance sales are up significantly.

Premium fragrance products priced at $100 and above, represented approximately nine percent of total fragrance juice sales in Q1 2009, and generated $26 million, a 10 percent increase from Q1 2008.

Makeup products priced at the premium level ($50 and above) have also seen strong growth in Q1 2009, versus three years ago in Q1 2006. Premium price face makeup, which represented six percent of total face makeup sales in Q1 2009, saw dollar volume almost double since Q1 2006, from $14.1 million to $27.1 million, a 3 percent increase from Q1 2008. Premium-priced eye products (priced over $35) were especially strong. The launch of MAC’s Hello Kitty Eye Shadow X 4, priced at $38, was a key driver of the growth in premium for eye.

“The growth in premium fragrance and makeup, while smaller segments compared to premium skincare, are driven by the fact that these products are still perceived as more niche and unique to the prestige arena,” said Karen Grant, senior global industry analyst and vice president of Beauty.

Premium Price Skincare No Longer Thriving

Premium price skincare face products (priced over $70) have, up until now, been believed to be somewhat recession-proof. Recently, however, premium price skincare face product sales declined by six percent in Q4 2008. That was the first time premium price skincare face products performed worse than products priced below $70, which were down only three percent in Q4 2008. Sales of premium price face products fell 7 percent in Q1 2009, while sales of face products priced below $70 dropped five percent.

“The trends in premium price beauty show women are becoming increasingly selective in where they choose to invest their limited resources. While skincare is the category most women will opt to spend on, if there are viable options at a lower price touting benefits perceived to be comparable with premium offerings, then women are more apt to try these products, especially in these difficult times,” ended Grant.

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