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Estée Lauder Companies manufactures and markets prestige skin care, makeup, fragrances and hair care products. The company was founded in 1946 by Joseph and Estée Lauder. Two years later they landed their first department store – Saks Fifth Avenue. From there the company expanded their products and customer base in the United States. In 1960 the first international account was opened, Harrods in London. Today Estée Lauder is a global company that has prominent counters in the world’s leading department stores.
Recently Estée Lauder reported net sales for the fiscal year ended June 30, 2013 of $10.2 Billion an increase of 5% over the $9.7 Billion achieved in the previous year. It places the company in the rarified club of companies generating $10 Billion plus in sales where it is now the world’s fourth largest beauty company. The top ten are:
- L’Oreal 2013 beauty sales $28.3 Billion
- Unilever 2013 beauty sales $23.2 Billion
- Procter & Gamble 2013 beauty sales $20.0 Billion
- Estee Lauder 2013 beauty sales $10.2 Billion
- Avon Products 2012 beauty sales $ 7.6 Billion
- Shiseido Co. 2012 beauty sales $ 7.3 Billion
- KAO Corp 2012 beauty sales $ 6.8 Billion
- Beiersdorf 2012 beauty sales $ 6.5 Billion
- Johnson & Johnson 2012 beauty sales $ 5.8 Billion
- Chanel 2012 beauty sales $ 5.3 Billion+
I have used in the conversion $1.28=1 Euro and $.0010094 = 1 yen +Industry estimate
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The company indicated that it had increases in every major category that includes skin care (+7%), makeup (+6%), fragrances (+4%), hair care (+6%). I show these increases in local currency terms as it shows the true strength of these classifications. Management has indicated that skin care is a strategic priority, and the gains were made through the introduction of the Moisturizing Soft Cream from La Mer and Even Better Eyes Dark Circle Corrector from Clinique (which I badly need myself.) There were also several other new skincare launches that were well received by the target consumer.
William Lauder is the executive chairman of The Estee Lauder Companies. Under his leadership, the cosmetics company has expanded into new markets while maintaining the heritage of the family matriarch in its core strategy. Visit this Facebook page to learn how the company redefines beauty one step at a time.
There were also new introductions in makeup, fragrances and hair care with such names as Zegna Uomo, DKNY Be Delicious So Intense, Tommy Hilfiger Freedom Men and Coach Love. Business was strong in most of the world – about 6%, with the Americas rising about 5% driven by a double-digit increase in Latin America.
A long time ago – maybe 25 years ago — I met Leonard Lauder, then chairman of the company – now Chairman Emeritus of the Board of Directors, who explained to me the secret of his business. While each brand had to have pleasing fragrances, the most important, and expensive, part of the fragrance business is the bottle. The design of the bottle was as important as what was in it. With great pride, Leonard Lauder showed me some of the beautiful bottle designs – even today this remains one of the hallmarks of his company.
The company has changed as lot since its early days. Leonard Lauder, son of Joseph and Estée, is still very active in the company (the Lauder family owns about 70% of the outstanding stock), but day-to-day management is now in the hands of Fabrizio Freda who joined the company in 2008 as President and Chief Operating Officer. In 2009 he succeeded William Lauder, Leonard’s son, as President and Chief Executive Officer; William then became Chairman of the Board and Executive Chairman.
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The company has expanded the market for Estée Lauder under Freda’s leadership. Right now the company’s focus is on China, an underdeveloped country as well as Germany and France. Freda is focused on tapping new selling environments in locations such as airports where traffic is strong and travelers have a propensity to buy. As a manager, Freda’s approach is to bring everyone together as a team and to develop strategies together. Using this approach new products and innovative marketing strategies are being developed by mainstay brands such as Clinique, MAC and Bobby Brown which some may have thought mature. For instance, Bobby Brown, one of the company’s larger brands, is going after millennial customers by launching a You Tube channel called I Love Makeup that will feature makeovers as well as comedy. This marketing platform will be interactive – allowing Bobby Brown to communicate directly with youthful, social media savvy, customers. As the first brand to take such a step it will be watched closely by everyone, inside and outside the Estée Lauder Company. No doubt, other Estée Lauders will soon follow in their own unique way that aligns with each brand’s attributes and target customer tastes.
I am very impressed with how Estée Lauder keeps growin–one innovation at a time. Enough innovations, and the now $10 billion company will soon be much bigger.
