The New York Timesreports
that as the economy tanks, lipstick sales are soaring. The theory is that as consumers tighten their belts, they pass on really expensive shoes or clothing but will treat themselves to a $22 lipstick instead.
....buying lipstick echoes a theory once proposed by Leonard Lauder, the chairman of Estee Lauder Companies.
After the terrorist attacks of 2001 deflated the economy, Mr. Lauder noticed that his company was selling more lipstick than usual. He hypothesized that lipstick purchases are a way to gauge the economy. When it's shaky, he said, sales increase as women boost their mood with inexpensive lipstick purchases instead of $500 slingbacks.
Beauty brands remain true believers in the theory, even though in the last few years the lipstick market has fallen on hard times as its glistening cousin, lip gloss, has had robust sales.
With the specter of another recession, brands like Clinique and DuWop Cosmetics are preparing for a big year in lip color, for two reasons.
First, they would like to see a return to lipstick, which usually costs slightly more than gloss. Second, the companies believe that in down times women will continue to splurge on lip lacquer even as they make do with last season's dress.
But do economists, and not just companies that need to move a lot of lip color, believe that lipstick sales could skyrocket as the economy tanks? And what's the draw of lipstick in particular for women worried about having to pay as much for gas as they would a handbag?
Not only is the lipstick theory plausible, "it's perfectly consistent with all kinds of economic theory," said Richard DeKaser, the chief economist with National City Corporation, a financial holding company and bank in Cleveland.
Three sorts of products sell robustly during tough times, said Lou Crandall, the chief economist at Wrightson ICAP, an independent research firm.
The first is what economists call traditional inferior goods, what people have to buy when they can no longer afford their favorites. If you're a salmon lover eating tuna casserole, you're chewing on inferior goods.
Lipsticks aren't inferior goods, economists say, but they could be small indulgences, an inexpensive treat meant to substitute for a bigger-ticket item. Or lipsticks could also be morale boosters, like Charlie Chaplin films were during the Depression. A warm shade that perfectly matches your skin tone might make you forget how far your 401(k) has tanked.
Other fashion indicators that economists have noted are the length of hemlines and the length of womens' hair. We think the lipstick (or lipgloss -- with SPF of course) sales theory is a good one. It's a way to treat yourself with a bit of indulgence that won't break the bank. Recent articles now say that only the super-rich are unaffected by the country's economic woes. Mere millionaires are flying first class instead of chartering planes, for example.
