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According to the “lipstick index,” sales of lipstick go up in times of economic downturns. The theory, if you believe it, says consumers cut back on large purchases and instead opt for smaller, more affordable luxuries.
So what is the likelihood of success when a brand launches a $160 lipstick in this economy?
We may soon find out, thanks to Louis Vuitton’s new La Beauté line, launched this month with Dame Pat McGrath as its creative director. The acclaimed British makeup artist was dubbed one of the most influential people in the world by Time in 2019, and her own makeup brand, Pat McGrath Labs, was once valued at over $1 billion.
The line officially launched Friday and includes $160 lipsticks and lip balms, $250 eyeshadow pallets, each with four shades, and a line of accessories ranging from a $2,990 mini Louis Vuitton trunk that holds exactly one lipstick to an $870 vanity case that holds, paradoxically, four more.
The products look as gorgeous as one would expect from the iconic French fashion house. Lipstick cases and the actual bullet are imprinted with the LV logo, while the accessories are emblazoned with the brand’s iconic monogram pattern.
Still, the prices are remarkably high, even in the world of luxury beauty. You can buy a Chanel or Dior lipstick, for instance, for a third of the price ($50) of Louis Vuitton’s, and Hermès lipstick ($81) for about half the price.
The debut comes during a broader slowdown in luxury that’s hit even the biggest brands, including Louis Vuitton’s parent company, LVMH, whose long list of brands includes Dior, Fendi, and Givenchy. LVMH’s revenue was down 4% in the first half of 2025 compared to the same time period a year prior, the company said in its July earnings report.
Consumers are being ‘choiceful,’ but they’re still splurging
“Consumer sentiment right now is pretty complicated,” Tamara Charm, a partner at McKinsey who focuses on consumer insights, told Business Insider. Sentiment is not quite as low as it was several months ago, but consumers are still cautious and price-sensitive, she said.
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“However, we also see consumers really splurging,” she added. “But it’s for the right thing at the right time.”
Charm said luxury buyers can generally be divided into two groups: those for whom those price points are not out of reach, and those she calls aspirational luxury buyers, who still purchase luxury goods despite it being a reach for them.
While the former — regular luxury buyers — are still spending on luxury as normal, she said it’s the latter who have gotten pickier about when they splurge.
“Luxury brands need this aspirational luxury consumer, and the aspirational luxury consumer is being a lot more choiceful right now,” Charm said, adding that the clients she works with are thinking a lot about what the current trends are and what might still get consumers to “reach up.”
Typically, consumers are willing to splurge on super trendy and of-the-moment items, especially when it comes to social media-heavy Gen Z, as well as services or items that have a real “treat yourself” vibe.
“Something like a small expense that gives an outsized punch of fun or indulgence is oftentimes where you see the splurge,” Charm said, which could bode well for Louis Vuitton’s new beauty products, if you buy into the lipstick index.
Hannah Reed, a research analyst at Walnut Collective, told Business Insider that consumers have placed a higher value on skincare and cosmetics in recent years, demonstrating a willingness to pay more — or “invest,” as beauty fans like to call it — for the right product.
“Obviously, with Louis Vuitton, it is going to be on the upper end, but if it’s a good product that works, consumers will see value in it,” she said.
The lipsticks are also refillable, with refills costing $69, so some consumers might view the fancy case as more of a delightful trinket or keepsake. “Then you’ve got something for life, but you can purchase the product as and when you need it or run out,” Reed said.
She added that novelty is also a big draw, and the LV-monogrammed lipstick and eyeshadow cases are the kind of thing that Gen Z shoppers might love, especially if they can use them as bag charms.
Deena R. Merlen, a partner at Reavis Page Jump who has worked with luxury brands, said that despite its relatively high price point, the beauty line is still more affordable than Louis Vuitton bags and could serve as an entry point to the brand. In that sense, she said, the pricy lipstick could be more about optimism rather than a recession indicator.
“Maybe you can’t afford that $6,000 Louis Vuitton bag yet, but you’re up-and-coming, you can afford a $160 lipstick, because times are good and only getting better,” she told Business Insider.
The trick for luxury brands is to find the right product at the right time and price point to inspire consumers to splurge despite their economic worries.
“Value is in the eye of the beholder right now,” Charm said. Just look at what some consumers are willing to spend on Labubu dolls.
“I think we’re going to continue to see luxury products where some of us really don’t understand who is going to buy it,” she said, “and others of us couldn’t understand why the rest of the world doesn’t realize what a value this is.”
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