Is The Lipstick Index an Urban Myth?

Many years ago, cosmetics tycoon and Estee Lauder chairman Leonard Lauder observed that when the economy stalled, lipstick sales tended to spike and accordingly coined the phrase “lipstick index."

During the Depression and in the time following 9/11, there were 25% increases in lipstick sales. “The lipstick index is a way to judge a recession,” wrote NY Times op-ed columnnist Maureen Dowd in 2001. “When the economy goes down, lipstick sales go up. Women indulge in smaller luxuries and skip bigger ones.”

But this year’s economic downturn might be so bad that it could defy the hallowed lipstick index. So far, sales are down 4%.

Joanne Hwang, an account executive for Becca Cosmetics, spends most of her workdays trawling the department stores’ makeup counters, observing sales and training employees. She sees no evidence of an increase in cosmetics sales this fall. “It’s harder than ever to get customers to buy makeup,” says Hwang. “The department stores are all suffering, even the cosmetics sections.” She suspects that if anyone is having a spike in sales, it would be Sephora.

“I bet Sephora’s sales are up compared to department stores,” says Hwang. “People don’t want to go to the department store and get hassled by sales people. They want to go to Sephora, wander on their own, try stuff on and forget about their bills, just like in a grown-up candy shop.”

Ariana Garrido, a 20-year-old student from Los Angeles, knows all too well the temptations of Sephora. Although she’s been holding off on cosmetic purchases since the economic downturn, she did allow herself one tube of Sephora brand lipstick. “It was $15,” says Garrido. “It was the cheapest in the whole store.”

The economic crisis led to a shocking 30% pay-cut for Leticia Alvidrez, a 35-year-old elementary school administrator from Montebello, Calif. “I think the economic slowdown has forced me to make some drastic changes,” says Alivdrez, whose last beauty purchase was eyebrow powder from (where else?) Sephora. “Like, I don’t need to have 15 shades of lipstick. I realized that my purchases were frivolous. I was a wasteful spender. I always felt deserving of these things because I work hard, but now I’m trying to be smarter with my money. And even though they’ve compensated us for our lost salary, I’m now a better consumer and more conscious of how I spend my money.”

Alvidrez now finds that instead of carrying around four shades of lipstick in her purse, just one will do for now.

But what about you? Have you spent more or less money on beauty products since the economy's downslide?

—Serena Kim