February 19, 2008
Weak economy cutting into vanity business
By Debra Sherman - Analysis
CHICAGO (Reuters) - A weakening U.S. economy is taking a small swipe at American vanity, with Lasik vision correction procedures down and other cosmetic treatments and surgeries slipping.
Although analysts say a recession would have to be severe before Americans would forgo cosmetic procedures, especially the less expensive ones, there are still some signs of distress.
"We've already see some. It depends how deep and how long the recession is," Jefferies & Co analyst Peter Bye said.
The economic downturn already has affected cosmetic procedures, especially the higher priced surgeries. Lasik, for example, might cost $3,000 to $4,000, and breast implants can cost $10,000. Injectables, including dermal fillers and Botulinum Toxin, are less affected since they typically cost less than $1,000, he said.
Advanced Medical Optics Inc (EYE.N: Quote, Profile, Research, Stock Buzz), a maker of eye-care products and lasers used to correct vision, acknowledged this week that the economy is starting to negatively impact these elective procedures.
Advanced Medical Chairman and Chief Executive Jim Mazzo told a conference call that during the first six weeks of 2008, "we have seen the deteriorating U.S. economy negatively impact our domestic LASIK procedure volumes."
Mazzo lowered his 2008 financial forecast, citing among other things, expectations for a significant drop in vision correction procedures.
Joanne Wuensch, an analyst with BMO Capital Markets, said it was the first time Advanced Medical's management has acknowledged that the economy was affecting its business.
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