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Wikipedia: Lipstick index
The lipstick index is a term coined by Leonard Lauder, chairman of the board of Estee Lauder, used to describe increased sales of cosmetics during the Early 2000s recession. Lauder made the claim that lipstick sales could be an economic indicator, in that purchases of cosmetics - lipstick in particular - tend to be inversely correlated to economic health. The speculation was that women substitute more expensive like dresses and shoes for lipstick in times of economic distress.
Lauder identified the Lipstick index as sales across the Estee Lauder family of brands. Subsequent recessions, including the Late-2000s recession, provided controverting evidence to Lauder’s claims, as sales have actually fallen with reduced economic activity. Conversely, lipstick sales have experienced growth during periods of increased economic activity. As a result, the lipstick index has been discredited as an economic indicator. The increased sales of cosmetics in 2001 has since been attributed to increased interest in celebrity-designed cosmetics brands.
Leading Lipstick Indicator
An indicator based on the theory that a consumer turns to less expensive indulgences, such as lipstick, when she (or he) feels less than confident about the future. Therefore, lipstick sales tend to increase during times of economic uncertainty or a recession.
Wikipedia: Leonard Lauder
Leonard Lauder (born 1934) was chief executive of Estée Lauder Companies until 1999; now he serves as chairman of the board. Today Estee Lauder operates several brands in the cosmetics industry including Estee Lauder, Clinique, MAC Cosmetics, Aveda, Bobbi Brown and Stila. Lauder gained notoriety in 2001 for creating the Lipstick index, a since discredited economic indicator.
Leonard Lauder comes from the Lauder family, a prominent Jewish family in the cosmetics business; he is the son of Joseph and Estée Lauder, and the older brother of Ronald Lauder.
New York (NY) Times
Oedipal Loop de Loop
By MAUREEN DOWD
Published: Sunday, December 2, 2001
So will the president focus more on Wall Street’s lipstick index or Teddy Roosevelt’s big-stick index?
The lipstick index is a way to judge a recession. When the economy goes down, lipstick sales go up. Women indulge in smaller luxuries and skip bigger ones.
The big-stick index is a way conservatives judge the president. Will W. whack Saddam with the stick, or will he fold, the way his dad did?
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Lipstick sales say a mouthful about economy.
Miami Herald (Miami, FL)| December 12, 2001
Byline: Paul Brinkley-Rogers
Published Wednesday, December 12, 2001
The economy struggles and war rages, but women are buying more lipstick, a fact borne out by increased production, sharply higher retail sales, and acknowledgement by fashion houses that this is no myth.
It may sound implausible. But ever since the Great Depression of the 1930s, female lipstick buying patterns have been the reverse of market indexes. The index plunges, lipstick sales soar. A variation of this trend occurs in war, when sales of blood-red lipstick suddenly take off, although no one knows exactly why.
Lipstick, from $1.95 to $25, is a quick feel-good fix that allows females to shop without having to buy a new outfit, many experts say. ``When things get tough, women buy lipstick,’’ says Leonard Lauder, chairman of the Estee Lauder Companies.
They are buying more lipstick—perhaps 11 percent more than last year, according to a study of major retail outlets—in sync with another indicator of perilous times, the so-called hemline factor.
When there is war, the theory goes, hemlines come down in high fashion, to at least calf length, because long skirts make women feel more secure.
New York (NY) Times
Hard Times, but Your Lips Look Great
By KAYLEEN SCHAEFER
Published: May 1, 2008
Ms. Stein’s rationale for buying lipstick echoes a theory once proposed by Leonard Lauder, the chairman of Estée 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.
A Girl’s Guide to Economics
I like lipstick as much as the next gal. But can we quit attributing my purchases to the ‘Lipstick Index,’ please?
By Jessica Bennett | Newsweek Web Exclusive
Apr 23, 2009
As the truism goes, when times get tough, women buy lipstick to make themselves feel better. In 2001, Estée Lauder chairman Leonard Lauder coined the phrase “Lipstick Index” to describe why lipstick sales rose by 11 percent in the months after 9/11. The idea: when the economy is crap, we can’t afford to buy the latest “it” bag or expensive pair of “Sex and the City"-inspired Manolos. So, to make our poor little shopping-obsessed selves feel better, we spend on things that make us feel pretty: colorful tubes of lipstick, plumping gels or glosses that can cost upward of $50. As Lauder put it, “In stressful times, many consumers are reaching out for those small indulgences that provide momentary pleasure.”
That may be true, but apparently those indulgences are no longer centered on lipstick. This recession around, it’s flawless skin—not rosy lips—that has become the female pick-me-up. According to new figures from Kline & Company, a market-research firm, lipstick sales across the board fell 5.8 percent during 2008, while liquid foundation sales have grown 2.5 percent. Which means, as the Financial Times put it in a story last week: “In this recession, foundation is the cosmetic to watch.”
New York City • Banking/Finance/Insurance • (0) Comments • Sunday, November 01, 2009 • Permalink