Are Cosmetics Recession-Proof? Mary Kay Thrives in Bad Economic Times

Dec. 14, 2011— -- intro:Thousands of women were recognized for expanding their businesses at the Mary Kay Cosmetics Career Conference's awards nights in Dallas this past summer because, contrary to almost everything else in the current economic downturn, lipstick sells in tough times.

In the first six months of this year, more than 200,000 recruits signed up to sell Mary Kay products. There are now 2.5 million independent sales consultants selling $2.5 billion worth of mascara, moisturizer and other beauty products globally.

"People still want to buy lipstick," CEO David Holl told "Nightline." "They may not want to buy as many lipsticks or as much of the skincare line, but you clearly see that if you have a value product that is just a little bit lower price point, that our sales force and their customers jump on that for sure."

Mary Kay's success is based on personalized attention, competitive prices, a fun way to shop and convenient delivery. Courtney Armstrong was a big seller in East Texas when "Nightline" first profiled her in 2009 and she says the recession hasn't slowed her down since then.

"I know the economy's kind of hurting a lot of people, but really we haven't seen that in Mary Kay," she said. "I have more customers now, more consultants now that I've been working with and it's really been an incredible year. We increased over the last year and added over a hundred new women to my team in the past year."

Armstrong and her team sell enough make-up to keep her in one of those famous pink Cadillac SUVs – her second, and she's positioned to earn a third.

"A lot of women are looking for a back-up plan," Armstrong said. "They're concerned about stability of their job, the stability of their husband's job. So they're looking for a back-up plan. A way to make extra money."

Company founder Mary Kay Ash, who started the business in 1963, joins a long list of other famous female entrepreneurs who have turned a simple idea or product to a branded empire.