Estee Lauder Company

estee lauderBeauty is an attitude. There’s no secret. Why are all brides beautiful? Because on their wedding day they care about how they look. There are no ugly women – only women who don’t care or who don’t believe they’re attractive.” –Estee Lauder

Estee Lauder, the queen of cosmetics, always thought she was “growing a nice little business.” That nice little business today holds brands such as Clinique, MAC Cosmetics, Bobbi Brown, Aramis, Michael Kors, Tory Burch, Coach etc. in its kitty, controls 45% of the cosmetics market in U.S. department stores, sells in 118 countries, and had total revenues of 7.32 billion dollars in 2009.

Josephine Esther Mentzer was born to Hungarian Jewish immigrants Rose Schotz Rosenthal and Max Mentzer on July 1, 1906 in Corona, Queens, New York. Her father owned a hardware store and the whole family lived above the store. During her teenage years, Esther (called Esty by her parents but sounding more like Estee because of her father’s accent) got interested in her chemist uncles’s business. Her uncle, John Schotz, created all kinds of creams, lotions or fragrances. After graduating, young Esty started selling her uncle’s beauty products to her friends, shops, and resorts. Her uncle discouraged Estée from using detergent soaps on her face and taught her how to make the cream that, years later, she would improve upon and market under her own name. The would-be billionaire had already entered the cosmetics business at a very young age. Her experience at her father’s store groomed her in the art of personal selling.

estee lauder joseph lauder

Estee married Joseph Lauter on January 15, 1930. Afterwards, she changed the surname from Lauter to Lauder which was the original family name of her husband. Their first son Leonard was born on March 19, 1933. During this period, Estee ventured into an acting career. She even took an acting course at New York Cherry Lane Theater. However, she soon realized that she was not going to make it as a top actress and gave it up. Meanwhile, she kept working on her uncle’s business. Estee continued to refine and improve her uncle’s creams, cooking up concoctions on her kitchen stove. To create a market for her product, she gave free demonstrations and makeovers at salons, hotels, the subway and even in the street. Unfortunately, Estee was so involved in her ambitions that she neglected her family and husband. In her own words- “I did not know how to be Mrs. Joseph Lauder and Estée Lauder at the same time.” Estee and Joseph got divorced in 1939. Estee moved to Miami Beach, Florida, and continued to run her business there. Although she did meet several men there, she gradually realized she still missed her ex-husband. She met her ex-husband again when Leonard fell ill and both Joseph and she took care of their son. The old sparks reignited. Joseph and Estee married again in 1942. This time, their marriage fostered a lifelong bond and a lasting business partnership. Estee spoke about her sadness about the four years of their separation: “You cannot fly on one wing”.

The first store of the business opened in New York City in 1944. Estée Lauder started her business with four groundbreaking skin care products–Crème Pack, Cleansing Oil, Super-Rich All Purpose Crème and Skin Lotion— which she sold in beauty salons and hotels in the New York area. In the same year, Estee gave birth to their second son Ronald. The Estee Lauder Inc. was formally established in 1946. I an ingenious business move, Estee decided to sell her products only through best department stores, ignoring the advices of her accountant. She convinced Saks Fifth Avenue to place a large order for her skin creams, which the store promptly sold out of within two days. After succeeding at Saks Fifth Avenue, Estee expanded to Neiman Marcus and then several other stores across the country. Soon Estee Lauder line became available at such prestigious stores as I. Magnin, Himmelhoch’s, Sakowitz, Marshall Field’s, Nieman-Marcus and Bonwit Teller.

But they were still small in size. By the early 1950s Estee and Joseph realized that they needed to advertise. Unfortunately, their marketing budget of $50000 was scoffed at by the prominent ad agencies. Rejected by one ad agency after another, Estee and Joe decided to put all their advertising money into samples. They ordered huge quantities of cosmetics packaged in small sizes: lipstick, rouge, eye shadow, and creams, and started giving them as giveaways or gifts-with-purchases. Customers started to throng to Estee Lauder’s counters to get free samples, liked the products and came again to buy them. By the late 1960s, most major cosmetics firms began to copy the innovation and regularly used the gift-with-purchase to drive traffic to their counters.

estee lauder youth dew ad

But by that time Estee had launched her first fragrance-Youth Dew, a bath oil that doubled as a perfume, and it quickly became a big hit with consumers. Sales shot up exponentially. By the mid-1950s, Youth Dew accounted for 80 percent of Estee Lauder’s sales and had transformed the fledgling company into a multimillion-dollar business.

In the 1960s Estee decided to venture into male cosmetics market and came out with an entire line of men’s products, Aramis, and a path-breaking fragrance. Intended to be the most elegant cologne in the world by its creators, Aramis still remains important in the world of men’s fragrances.

aramis fragrance ad

Meanwhile Estee also ventured outside the United States, convincing Harrod’s of London (after years of wooing its owner, influential British beauty editors and the store’s cosmetics’ buyer) and Paris’ Galleries Lafayette to carry her products. Here’s a story worth telling- The perfume buyer at Galeries Lafayette, was scornful of Estee Lauder and even refused to meet her. After trying fruitlessly for several days to meet him, Lauder took matters into her own hands. She walked into the perfume section of Galeries Lafayette, and emptied a bottle of Youth Dew onto the carpet. For the next two days, shoppers repeatedly asked Galeries Lafayette saleswomen where they could purchase the scent. The store’s cosmetics buyer got convinced with women’s enthusiasm for Youth Dew. Within a few weeks, Estée Lauder opened her first counter in Galeries Lafayette.

clinique ad

In 1967, American Vogue magazine published an article called “Can Great Skin Be Created?”, written by beauty editor Carol Phillips with Dr. Norman Orentreich, discussing the significance of a skin-care routine. Evelyn Lauder, Leonard’s wife, read the article, and brought it to Estée’s attention. Both Carol Phillips and Dr. Orentreich were recruited to help create the brand, and in August, 1968, Clinique premiered as the world’s first allergy tested, dermatologist-driven line at Saks Fifth Avenue. The brand had a tough start initially, losing 3 million dollars in the first two years. But Estee refused to give up the brand. Soon the brand started gaining recognition worldwide. Lauder worked as the training director for Clinique. She was the first person to wear the trademark white lab coat, now worn by Clinique salespeople at cosmetic departments worldwide.

In 1982 Estée Lauder invented Night Repair, an innovative serum that revolutionized skin care. At that time it was called Night Repair Cellular Recovery Complex and it was the first night treatment ever introduced to the market. In 1991, Estee Lauder reformulated the Night Repair with proprietary antioxidant technologies to help boost skin’s natural renewal process and ability to recover from damage and repair the visible signs of aging overnight. Advanced Night Repair Protective Recovery Complex was born.

In 1990, Leonard Lauder founded Origins (Origins Natural Resources), a cosmetics brand known for its natural skin care products. Its symbol of two intertwined trees represents the power of nature and the proof of science.

Estee Lauder acquired La Mer in 1995. Crème de la Mer, Estée Lauder’s signature product, is a moisturizing cream containing fermented kelp. It was originally developed by NASA scientist Max Huber to treat his severe chemical burns which he sustained in an accidental explosion during an experiment. Dr. Huber sold and marketed this product himself. After his death, his daughter continued selling the cream until Estée Lauder purchased the rights to manufacture and distribute it.

Estée Lauder Companies acquired controlling interest of MAC in 1996. After the death of his partner, Frank Angelo, cofounder Frank Toskan sold the rest of the company to Estee Lauder completely in 1998.

The company continued to acquire many other brands and kept growing. Today, Estée Lauder has a total of 27 brands which include:
American Beauty
Bobbi Brown
Bumble and bumble
Daisy Fuentes (divested)
Donald Trump The Fragrance (discontinued)
Donna Karan
Estée Lauder
Good Skin
Jo Malone
Kate Spade (divested)
Lab Series
La Mer
MAC Cosmetics
Michael Kors
Prescriptives (as of January 31, 2010, available only on-line)
Sean John Fragrances (divested)
Smashbox Cosmetics[9]
Stila (sold)
Tommy Hilfiger
Tom Ford Beauty
Tory Burch (launching in October 2013)
Ermenegildo Zegna

At age 97, Lauder died of cardiopulmonary arrest on April 24, 2004 at her home in Manhattan.

Lauder was the only woman on Time magazine’s 1998 list of the 20 most influential business geniuses of the 20th century. She was the recipient of the Presidential Medal of Freedom. She was inducted to the Junior Achievement U.S. Business Hall of Fame in 1988.

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