Quote:
Originally Posted by Folie
Was Mac ever doing poorly this year? I only ask because certain things have been done, or it was assumed/speculated/maybe Mac even said, due to a poor finances. I think this is b.s. On Mac's part. Does anyone have figures to show Mac was at one point doing poorly?
I like Mac a lot, but I can't help but feel they've been really greedy this year. If there isn't a sale, it will only confirm my feelings.
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Part of the thing to keep in mind is that MAC is a part of the EL, which is a publicly traded company. It doesn't really matter how much money a company is making -- what matters is how much MORE money a company is making from the previous year. It can make for some skewed thinking; a company could be perfectly successful in terms of how much money it's making, but if it's making slightly less as compared to the previous year, it's doom and gloom.
I don't think it's greed so much as a crazy rat race to beat the previous year.
MAC's numbers aren't available because it's part of Estee Lauder. But EL's financials are available. EL, like all luxury brands, was hit hit hard last fiscal year (theirs ends on June 30). Because of how its fiscal year runs (July 1-June 30), last year was probably particularly bad, because it included the awful 2008 Christmas season as well as the pretty bad spring 2009. According to
EL's FY 2009 results, net makeup sales declined from the previous year. Before the fiscal year began, it was projecting that sales would rise.
Research also debunked the existence of the so-called "lipstick index." Women still spent on skincare and foundation, but many -- particularly American women -- cut back on cosmetics and "traded down" to lower-priced brands. And
there was evidence that lipstick sales started to tank along with the rest of the economy.
I don't think anyone can say that MAC did well last fiscal year; all the available info would indicate otherwise. In
the first quarter of the current fiscal year, makeup again saw declines, but things have picked up since then. EL has raised earnings expectations for this fiscal year since the end of the second quarter (which ended Dec. 31).
But companies don't turn around on a dime, either. I suspect that a lot of the sellouts we've seen in collections this calendar year are just a result of what happens when sales pick up at the same time that supply declines. I think MAC cut back a lot on production -- yes, Marine Life sold out like crazy, but look at how many of it counters and stores actually got. MAC could probably have sold a lot of certain items from SFC, GMLoL, Art Supplies and TTB if there were enough of them.
MAC MAs on Specktra have said that one of the reasons the company had so many F&F sales last calendar year was because they had too much product because things weren't selling. I suspect that glut of unsold product is also why there seems to be less available now; let's face it, MAC would have to be pretty stupid to NOT cut production after that.
I would love to see a F&F sale, but I understand that it probably doesn't make much sense for MAC to have one (from a business perspective). Inventory is definitely low, and MAC doesn't need to "get rid" of a lot of stuff in a hurry. It may not even have enough inventory to support a huge F&F sale -- take a look at how many permanent items are sold out. Plus, an MA at my freestanding store told me there is a production issue with the mineralize foundations, and it won't be restocking them until at least August.
