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Lauder, Estee - Overview, Personal Life, Career Details, Social and Economic Impact, Chronology: Estee Lauder

cosmetics line company business

(1908-)
The Estee Lauder
Companies, Inc.

Overview

In 1946, Estee Lauder founded a cosmetics company that has since become one of the most successful and imitated ventures in this highly competitive field. Her line of fragrances, skin care products, makeup, and men’s toiletries is an international concern that in 1997 employed almost 15,000 people and grossed $3.4 billion. Many of the company’s top executives are second and third generation family members, also an exceptional feat in the industry. “By a combination of good luck and good judgment, Estee Lauder has become that rarest of species: a beauty business with a powerful personal image that is strong enough to outlive its founder in a way that Elizabeth Arden or Helena Rubinstein could not,” wrote fashion expert Suzy Menkes in her International Herald Tribune column in 1996.

Personal Life

While Lauder has always refused to reveal her actual age, her unauthorized biographer, Lee Israel, pegs her date of birth as July 1, 1908. The last child in a family that included one full sister and five half-brothers and half-sisters, she was originally named Josephine Esther Mentzer but went by her middle name, which she altered to Estelle as a teenager. Her parents were Jewish Hungarian immigrants who had settled on Hillside Avenue in Corona, a somewhat rural but unfashionable part of Queens that served as a garbage and ash dump for other New York City boroughs during the early years of the twentieth century.

Lauder’s father was a tailor by profession, but in Corona he opened a grain and feed store above which he and his family lived. Esther was a good student who attended P.S. 14 and Newtown High School in Queens. Among her early role models were her sister-in-law, Fanny Leppel Rosenthal, who ran a successful department store in the neighborhood, and an uncle, Dr. John Schotz, a chemist who had his own small laboratory and made face creams such as “Dr. Schotz’s Viennese Cream.” Lauder not only watched him concoct his products, she also used them herself; even as a teenager she was known for her beautiful complexion.

According to some accounts, Esther quit school around the age of sixteen and headed to Wisconsin to live for a while with her aunt; she may also have worked briefly in a beauty salon in Milwaukee. Before long, however, she was back in New York, where she married Joseph Lauter (who later changed the spelling of his surname) on January 15, 1930. Their first child, Leonard, was born in 1933.

An ambitious young woman, Lauder dreamed of a career in the cosmetics industry. Meanwhile, her husband failed at a series of business ventures of his own, and in 1939 the couple divorced. They remarried in 1942, however, and in 1944 they had a second son, Ronald. Around 1946 they founded the company that bears the Estee Lauder name. While Estee looked after product development, sales, and marketing, Joseph spent much of his career overseeing their manufacturing facility in Melville, Long Island. Both of their sons eventually went to work for the family firm, and later their daughters-inlaw and grandchildren also became involved.

By the late 1960s the Lauders were living in a Manhattan mansion, with homes in the south of France and Palm Beach, Florida, as well. Estee led an active life and was a well-known figure on the international social circuit. Aside from attending and giving lavish parties, she reportedly liked to watch the evening newscasts as well as the sitcom All in the Family. She doted on her grandchildren and her husband, who died in 1983 at the age of 80. Ever since breaking her hip in 1994, the cosmetics tycoon has very rarely been seen in public.

Career Details

Lauder’s motto has always been, “Not by dreaming or hoping for it, but by working for it.” As early as her teenage years, she was intensely interested in skin care. She swore by the use of her uncle’s products, which she herself had learned to make at home on her kitchen stove. Lauder began her career selling them to beauty salons, where she also gave facials and built up a loyal customer base by passing out free samples of the Schotz Creme Pack and All-Purpose Creme. During her estrangement from her husband, she split her time between Miami and New York City, working the beauty salon circuit in both cities. She also had a stand inside the Roney Plaza Hotel in Miami and sold her wares at Jewish resorts on Long Island and in the Catskills.

Lauder was a tenacious salesperson who was known to approach strangers and bestow skin-care advice and a free sample. After her remarriage, she began working behind department store cosmetic counters. Her goal was to obtain her own space at Saks Fifth Avenue, the premier retailer in the United States.

Despite advice from her accountant that launching a cosmetics company was foolhardy, Lauder officially formed Estee Lauder, Inc., around 1946 or 1947. Her instincts and experience told her that there was a great demand for beauty products, especially well-made and well-packaged ones. She also knew firsthand that women were not at all hesitant to spend money on themselves.

Lauder fulfilled at least one dream early in her venture when Saks Fifth Avenue became the first retailer to place a big order. Securing their business in turn helped her obtain counter space in other prestigious department stores around the country. But the tremendous growth of Estee Lauder, Inc., during its first few years of operation kept its founder extremely busy. She traveled incessantly, personally launching her line in an ever-expanding number of cities and training her sales staff.

The Estee Lauder line was profitable almost from the start, partly as a result of its founder’s penchant for building loyalty through free samples and her equally innovative “gift with purchase” idea. Advertising campaigns lured women to cosmetics counters by offering an attractive makeup bag or tote filled with a pair of lipsticks, a comb, miniature moisturizers, or other combinations of items, all free with the purchase of any Estee Lauder product over a certain amount. This promotional strategy proved to be so lucrative that many other companies with expensive cosmetics lines were soon imitating it.

In 1953, Estee Lauder achieved dramatic success with the debut of its first fragrance product, Youth-Dew. Initially available only as a bath oil, it was a megaseller from the start. “Youth-Dew was like the Giorgio of today,” a former Estee Lauder employee told Israel in Behind the Magic. “It just had that cachet. Middle America went bananas for it.” The company distributed free samples and conducted an aggressive promotional campaign; Estee herself wore it and sprayed it around department stores. Priced at $8.50 a bottle, Youth-Dew boosted Estee Lauder sales at certain stores from $300 a week to figures in the thousands. It eventually became an entire fragrance line that was still bringing in $30 million a year by the mid-1980s, some three decades after its launch.

Lauder’s other ventures were equally successful. A savvy interpreter of the beauty business, she continually introduced new products to fit with the times. In the early 1960s, for instance, she adopted a quasi-scientific approach to skin care in response to similar marketing strategies of various European cosmetics companies. Her first such product, Re-Nutriv, sold for $115 a pound and was a huge seller despite its high price.

The year 1968 marked the introduction of the Clinique skin-care and makeup line, which was aimed squarely at a younger generation of women. Its marketing strategy was to promote the fragrance-free formulas as part of a fresh, health-conscious lifestyle. There was no mention of the line’s connection with the Estee Lauder company (in fact, only cosmetics industry insiders were aware of it), and at Clinique counters the saleswomen wore lab coats. By the late 1990s, Clinique products were available in 81 countries, and sales of the line’s lipsticks alone numbered more than $17 million.

In 1979, Estee Lauder launched the Prescriptives makeup line. The 1980s saw the emergence of skin-care products that promised to reverse the signs of aging, including the company’s Night Repair, which first appeared in 1983 and has proven to be a big success in its segment of the market. In 1990, Estee Lauder introduced yet another new makeup line, the botanicals-based Origins.

Through the years, the Estee Lauder company has also attracted attention for its long-running advertising campaigns featuring well-known models. During the 1970s, Karen Graham was the first to be signed to an exclusive contract. She was succeeded by Willow Bay, Paulina Porizkova, and, in 1995, Elizabeth Hurley.

Estee Lauder retired from the day-to-day running of her company in 1972, at which time she handed over the reins to her son Leonard. Before Estee Lauder, Inc., opted to go public in 1995 by selling stock, it was the largest cosmetics company in private hands in the world. Under Leonard Lauder’s leadership, it has continued to grow and prosper, and now a third generation of the family is involved in the business. Aerin, Leonard’s niece, assumed the role of director of creative product development after graduating from the University of Pennsylvania in 1992. Her sister, Jane, focuses on sales and marketing strategies, including the “gift-with-purchase” promotions. Leonard’s son William, meanwhile, heads the Origins division and is apparently being groomed to take over his father’s job some day.

Social and Economic Impact

Estee Lauder is an undisputed giant in the fragrance and cosmetics industry. Her predecessors and erstwhile competitors long ago disappeared, victims of failure or mergers with other companies. Her innovative product ideas and business strategies helped turn the beauty business into an international industry with sales that are measured in the billions of dollars.

Chronology: Estee Lauder

1908: Born.

1930: Married Joseph Lauter.

1946: Incorporated Estee Lauder, Inc.

1953: Launched Youth-Dew and saw revenues skyrocket.

1968: Introduced Clinique line.

1979: Introduced Prescriptives line.

1990: Introduced Origins line.

1992: Went into semi-retirement.

1995: Estee Lauder, Inc. became a publicly-held company.

In recognition of her business and social standing, Lauder was offered the post of ambassador to Luxembourg by President Richard M. Nixon, which she declined. But her son Ronald has been active in Republican politics; during the administration of President Ronald Reagan, he was appointed ambassador to Austria. He later made an unsuccessful run for mayor of New York City.

Lauder’s tremendous personal wealth has enabled her to be generous with her donations to various projects and causes. In 1962, she established the Estee and Joseph Lauder Foundation, which has helped fund children’s parks in New York City. She has also donated to both the Whitney Museum of Art and the Museum of Modern Art. In 1978 she received France’s Legion of Honor award for her efforts to raise funds to restore the Palace of Versailles outside Paris. At the University of Pennsylvania, where both Lauder sons received degrees from the esteemed Wharton School of Business, the Lauder family donated several million dollars toward the creation of a graduate program known as the Joseph H. Lauder Institute of Management and International Studies. In addition, Leonard Lauder’s wife, Evelyn, is active in the breast cancer awareness and research campaigns spearheaded by the beauty and fashion industry in the mid-1990s.

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