As Congress balked at the $700 billion bank bailout and the stock market plunged last week, Dr. Howard Brooks, a cosmetic dermatologist in Washington, was asked by a female patient if his business had suffered.

"Honestly, it hasn't," he said. She replied, "I can't believe people are still spending this kind of money on Botox!" Brooks reminded her that she was having a Botox injection, and back came this reply: "I know, I just didn't think that other people would be."

That is the high-end beauty category in a nutshell: Everyone thinks hard times must be triggering women to pull back on discretionary vanity products but the opposite is true: Business is up.

Sales of prestige skincare brands at high-end department stores rose 2% to $1 billion in the first half, according to NPD Group. Products costing more than $70 were up 8%; those above $150 gained 21%. Similar increases were seen in fragrances and makeup. Analyst Karen Grant at NPD Group, Port Washington, N.Y., said the trend is global: Women "are not walking away from products that they love."

The beauty industry is forging ahead as if the meltdown were a mere bagatelle: Mintel analyst Taya Tomasello recorded 27 new skincare products launched this year that cost more than $200. Last year there were just 16 launches like that. It was the same in fragrances, she said. Some launches have had a Marie Antoinette-like quality to them:

• Nordstrom sells a 1.7-oz. tub of La Prairie Platinum Rare skin cream for $1,000.
• Bond No. 9 sold a perfume in a Swarovski crystal bottle that cost $620.

Product development cycles can take two years or more. Some of those launches were given green lights when the economy was at its height and anyone who owned a house felt rich. Now companies are locked in to promoting them, come what may. But Sept. 11, 2001, demonstrated to cosmetics marketers that women don't pull back on beauty in down cycles.



"Women have a basic belief that they save on the things they have to buy in order to spend on the things they want to buy," said Julia Beardwood, principal at design shop Beardwood&Co., New York, who has worked for Bath & Body Works and Procter & Gamble. "It's like men and booze. The economy is not going to stop men drinking because that's how they relax. For women, cosmetic skin treatments are their counterpart to booze."

Ad spend on a selection of high-end skincare brands (such as La Prairie and Sisley) is running 20% ahead of last year, at $16 million, according to Nielsen Monitor-Plus. For vanity prescription pharmaceuticals, such as Botox, Restylane, and Juvederm, spend is up 18% on last year to $66 million in the first half.

The economy is having some downward effect: Women are bailing out of the outrageous price-points and regrouping around the merely astonishing ones. A small survey of analysts and dermatologists suggests that the sweet spot is the $100-1,000 range. Above that, where laser skin treatments and surgical facelifts live, practitioners are seeing a slowdown. Customers may cancel a vacation or a new car, but injections cost $350-600, and thus still represent an economy of sorts.

Brooks, the Washington dermatologist, said he had been told by an Allergan rep that the company had targeted consumers with incomes of more than $100,000 for Botox, but was now preparing to shift that to the over-$50,000 bracket. Allergan did not return a call.

Still, some marketers have made attempts to dampen expectations. Jonah Shacknai, CEO of Restylane-maker Medicis, said the party could likely be over in the third and fourth quarters. "What we saw for the first six months is that the rate of growth decelerated more to the point of flatness." Medicis sales were up 22% to $132 million in the second quarter. But, "the physicians that I speak to are sharing economic data suggesting flatness or declines in the 10% range."

Dr. Robert Guida, a New York cosmetic surgeon, said his patients feel guilty about the economy, "but they do it anyway," he said. "One woman's husband lost his job at Lehman Brothers . . . They don't want their husbands to know."

Wouldn't the husband notice when his wife arrived home with a new face? "Most husbands don't pay attention to what their wives look like," Guida said.