Reuters Nail varnish has become the top-selling fashion accessory, replacing lipstick as an affordable indulgence in austere times and leading to a boom in sales as consumers flock to buy bright-colored bottles. Industry insiders predict nail color will be the fastest-growing beauty business in the next few years, providing a small yet promising pocket of growth for beauty groups such as Coty and L'Oreal who have led the rush to snap up independent brands. In France, over the whole of 2010, perfume sales in department stores rose 2 percent. Over the same period nail color jumped 42 percent, according to global market research company NPD. “We used to measure the economy with the lipstick index - when times got tough, we bought a lipstick. Now the economic barometer is measured by nail polish: as times get difficult, you buy a nail polish,” said Suzi Weiss-Fischmann, co-founder and artistic director of OPI, a US nail polish company acquired last year by perfume maker Coty . “It is a small thing that makes you feel good and brings you instant gratification.” Nail polish is still a small sub-sector of the global beauty industry compared to other make-up items such as lipstick, and looks even smaller when compared to perfume, but it is on its way to becoming an important business, analysts say. “We are seeing an explosion in many countries,” said Karen Grant, senior global analyst and vice-president of NPD's beauty division, mentioning the United States, France and Britain as examples. She likened the trajectory of nail varnish sales to that of lip gloss, a niche business which saw sales grow tenfold over the past decade. “If the nail polish market continues to grow, it could also become a big category,” Grant said. In the US, nail polish sales from department stores and mass market retailers excluding Walmart, rose 22 percent to $337 million in the six months to June 30, she said. Over the whole of 2010, sales rose 15 percent to $530 million. In Europe, the total mass market value of the nail polish market grew twice as fast as the overall make-up market, jumping 29 percent between 2007 and 2010 while the broader make-up market rose 17 percent, based on figures from Nielsen and IRI research cited by L'Oreal. Nail bars, which have mushroomed in big US cities, have become increasingly prevalent on Europe's high streets in recent years, targeting women seeking a small morale-boost at a small price. Some of the most coveted shades go by zany names. But the pace at which consumers are buying them is attracting the most hard-headed experts in the industry. OPI, whose bright red shade “My Chihuahua bites” sells for around 14 euros a bottle, expects volumes this year to jump to 50 million bottles from 30 million bottles in 2010. OPI, the market leader in professional salons, made over $200 million in sales in 2010 and expects to be close to $300 million this year. __
