Research Tests Lipstick Theory

Posted: June 5, 2008

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The industry also seems to be pinning its growth hopes on lipstick as Kline said fourth quarter 2007 ad spending on the category increased a whopping 41% compared to the previous year.

Financial impact of theory
Lipstick sales may well rise, but questions remain over the other products cosmetics companies produce. Whether the lipstick theory can really be extended to cover fragrances or other luxury cosmetics categories is unclear.

Many commentators remain unconvinced that the lipstick theory will really affect the financial fortunes of leading companies.

ABN AMRO analyst Jeremy Fialko even cast doubt on the reasoning behind the theory. He told CosmeticsDesign.com that while consumers may be inclined to buy lipstick in a downturn, they are far less likely to be in department stores in the first place to be tempted into handing over their cash at the beauty counter.

CosmeticsDesign.com, May 21, 2008