Money Matters: 'Lipstick Factor' boosts beauty industry

Reported by: Brittany Price
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Updated: 11/06/2012 10:06 am
In terms of cutting back on personal budgets, there seems to be at least one area where women aren't budging.

Beauty companies are actually seeing an upswing in sales. Merle Norman Cosmetics is one example.

The business was founded in the 1930s and was essentially built on one cleansing product during an economic down-turn.

"Which was at the worst part of the Depression in 1931," James Devlin, Merle Norman Vice President said.

Devlin said even then, the company flourished.

"It kind of demonstrates even in those hard times women would still spend very difficult-to-find dollars for makeup because it made them feel better," Devlin said.  

The industry has evolved since the business started.

"The world has become more complex since 1931. We have other factors. The internet has affected retail sales a lot," Devlin said.  

Nevertheless, Devlin said the trend in make-up sales hasn't changed.

"Women are still finding those dollars," Devlin said.  

Devlin's daughter, Shireen Devlin-Clark, owns Merle Norman's Lubbock location. She said it's a theory known as the “lipstick factor."  

"During an economic crisis people still find the means to afford small luxuries," Clark said. “A customer might not be able to go out and buy a new car, but they can afford a luxury lipstick."

The impact is more of a psychological one.

"If we're talking about a time where we're struggling and stretching even to reach that luxury lipstick I think if someone is more confident about the color it's a more secure purchase. They walk out with smiles. They walk out happy," Clark said.  

It seems to be evidence that when the product lasts, so does the euphoria.      

Beyond the beauty industry, other recession-proof businesses that top the list include fast food, movie tickets and convenience snacks.

Notice most of these things deal with instant gratification and feeling good.

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