Estée Lauder
1908 -

She transformed beauty into big business by cultivating classy sales methods and giving away samples
By GRACE MIRABELLA for Time Magazine
 

Leonard Lauder, chief executive of the company his mother founded, says she always thought she "was growing a nice little business." And that it is. A little business that controls 45% of the cosmetics market in U.S. department stores. A little business that sells in 118 countries and last year grew to be $3.6 billion big in sales. The Lauder family's shares are worth more than $6 billion.

But early on, there wasn't a burgeoning business, there weren't houses in New York, Palm Beach, Fla., or the south of France. It is said that at one point there was one person to answer the telephones who changed her voice to become the shipping or billing department as needed.

You more or less know the Estée Lauder story because it's a chapter from the book of American business folklore. In short, Josephine Esther Mentzer, daughter of immigrants, lived above her father's hardware store in Corona, a section of Queens in New York City. She started her enterprise by selling skin creams concocted by her uncle, a chemist, in beauty shops, beach clubs and resorts.

No doubt the potions were good — Estée Lauder was a quality fanatic — but the saleslady was better. Much better. And she simply outworked everyone else in the cosmetics industry. She stalked the bosses of New York City department stores until she got some counter space at Saks Fifth Avenue in 1948. And once in that space, she utilized a personal selling approach that proved as potent as the promise of her skin regimens and perfumes.

"Ambition." Ask Leonard for one defining word about his mother, and that's his choice. Even after 40 years in business, Estée Lauder would attend every launch of a new cosmetics counter or shop, traveling to such places as Moscow and other East European cities. Every Saturday she would go to her grandson's Origins store in Manhattan's hip SoHo district and say, "Let me teach you how to sell." Only declining health has halted those visits during the past few years.

Did Lauder ever stop selling in her prime? She would give her famous friends and acquaintances small samples of her products for their handbags; she wanted her brand in the hands of people who were known for having "the best." Early in my career at Vogue she invited me to lunch. Before the meal was finished, she made sure to give me three chicken recipes to help me interest the man I hoped to marry. (And did.)

She personified the mantra of "think globally, act locally." You can't get any more local than Estée Lauder's turning up at Saks on a Saturday, showing the sales staff how to give customers personal attention and a free gift. The latter promotion, by the way, proved to be a work of utter genius. Now an army of young women and men, exquisitely turned out and properly trained, do the same in every department store that's worthy of the brands.

The global enterprise of the Estée Lauder Cos. is centered on the 40th floor of the General Motors Building in Manhattan. Here the realm of very Big Business meets the world of Estee Lauder — focused, refined, every woman's dream office. It has been the office of a businesswoman and mother, where work and family mingled seamlessly for decades in a major corporation — the Holy Grail of many working women today (her grandchildren are in key positions). Carol Phillips, who founded the Clinique line for the company, describes Lauder's management style as highly creative. She conducted business in subtly elegant comfort. "Her conference room was like a dining room, and everything was perfect. In the office were all the pleasant things that go with running a household."

And what households she did have. Estée Lauder loved to "entertain," as giving large dinner parties was once called. She enjoyed "beautiful people" — celebrities, the rich and famous — and could invite them to dine with her at a table that could seat 30 without extensions. The food and the wines, lovely. She didn't miss a thing. She learned as she grew up. She watched; she enjoyed her world.

A word that must be added to the definition of Lauder: focus. She kept her eye on the world around her and on all women wherever they might be. She "liked to think about beauty and was determined to give women the opportunity to feel beautiful," says Leonard.

Beautiful didn't necessarily mean fashionable. Having edited two leading women's magazines over the past 25 years, I am hard pressed to think of a trend that Lauder started. The company never made any effort to be the makeup choice in the fashion shows. What you had with Estée Lauder was the quality of her view, of her demand for an ultrafeminine portrayal of the product. Every woman in every ad was the essence of femininity. Is that the kind of women we are talking about now? I'm not sure, but women know who Lauder is. Hers is a product with a focus — it's not MTV.

You will recognize the brand names, and what they stand for, as you would a friend's name: Estée Lauder, Prescriptives, Clinique, Origins and Aramis. The company has even bought hot new lines such as M.A.C., Bobbi Brown Essentials and Tommy Hilfiger fragrances. Lauder's company may not be able to set trends, but it is never going to be left behind by them. The boss — and her son after her — would never allow it. Says the company's vice chairman Jeanette Wagner: "No matter how she aged in years, she was still the youngest thinker in the room."
 

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Estee Lauder (née Josephine Esther Menzer, born about 1908) was the founder of the international cosmetics empire that bears her name and the chief developer of its products.

Estee Lauder was hailed as the reigning queen of the cosmetics world well into the 1990s. Innovative and daring, with an extraordinary talent for marketing and promotion, Lauder founded the company that bears her name in 1946 and built it in close cooperation with her husband, Joseph Lauder, and sons, Leonard and Ronald. It remained the last privately held cosmetics company in the United States and was run by her oldest son, Leonard.


Growing Up

Although she carefully guarded the secret of her age ("It's the best kept secret since the D-Day invasion," she wrote in her autobiography, Estee, a Success Story), it is widely accepted that she was born on July 1, 1908. She was the youngest child of her French Catholic/Hungarian Jewish mother and her Czechoslovakian father. Born Josephine Esther Menzer, she grew up in Corono in the Queens Borough of New York City. Her father, Max Menzer, was a Czechoslovakian horseman - an elegant, dapper monarchist who came to the United States at the turn of the century with no money and few marketable skills. He supported his family as a custom tailor and later opened a hardware store that gave Estee her first experience as a saleswoman, arranging merchandise and window displays. She credited her uncle John Schotz, a Hungarian chemist who concocted skin care creams in the Menzer household, with her first introduction to the world of cosmetics. "I watched as he created a secret formula, a magic cream potion, with which he filled vials, jars and flagons. … It was a precious velvety cream that magically made you scented. Maybe I'm glorifying my memories, but I believe I recognized in my Uncle John my own true path." For the next 20 years she worked to perfect her uncle's creams, stirring pots over the family stove and slathering her friends and neighbours with her concoctions.

In 1930 Lauder married Joseph Lauter (they changed the spelling to Lauder) and their son Leonard was born three years later. She also studied to be an actress after her marriage and birth of Ronald, but soon learned that her theatrical instincts were better applied to marketing than to performance. Even as a young mother she remained absorbed by her cosmetics business, selling her first products to the clients of The House of Ash Blondes Beauty Salon on Manhattan's Upper West Side. During the worst years of the Great Depression, Lauder marketed her products to ever growing numbers of women. Her innovative sales techniques, including free make-up demonstrations and sample give-aways, became trademarks of her growing enterprise, and she expanded her market to women at resort hotels throughout metropolitan New York.

In 1939 the Lauders were divorced and Estee moved to Miami Beach, Florida, where she sold her products to wealthy vacationers, encouraging them to spread the word of her cosmetics through her "Tell a Woman" campaign. The Lauders remarried in 1942 and a second son, Ronald, was born in 1944. Joseph Lauder took over the financial management of the business while Estee remained in charge of marketing.


A Turning Point

The company's first big order came from Saks Fifth Avenue in 1946, and the Lauders, who were then their company's only employees, cooked the creams - Super Rich All Purpose Cleansing Oil, Creme Pack, and Skin Lotion - on a restaurant stove and delivered them personally. The association with Saks marked a turning point in the company's history and helped the Lauders score entrees into other fashionable stores including Nieman Marcus, Marshall Field, and Bonwit Teller. The idea of selling her top of the line products exclusively through outlets at the best department stores became the strategy that industry specialists believe accounts for Estee Lauder's phenomenal marketing successes.

Convinced that her sales people were key to her sales strategy, Lauder travelled from New York to Texas and California, opening each Estee Lauder department store counter and carefully selecting and training the staff. "The saleswoman is my most important asset, the link to my customer." She insisted that there was no room in her organization for the "T. and T. salesgirl, always on the telephone or toilet." She pioneered the give-away promotion, "A free gift to every purchaser," and offered free samples through direct mail and at charity functions until sales mushroomed and competitors were left breathlessly following her example. She was also determined that the models for her products not be dehumanized and that the focus always be on the whole woman rather than her facial or body parts.


Introducing Fragrances

In 1953 Lauder introduced her first fragrance, Youth Dew, a bath oil with a sweet fragrance that doubled as a perfume. "We created a mini revolution. Instead of using their French perfumes by the drop behind each ear, women were using Youth Dew by the bottle in their bath water." In its first year Youth Dew did $50,000 in business; by 1984 the figure had jumped to $150 million. Lauder continued to broaden her line, introducing Beautiful and White Linen perfumes, Aramis for men, and the hypo-allergenic cosmetics known as Clinique.

Lauder kept the secrets of her ingredients within the family. While the products were made in Lauder factories, a final and secret ingredient was always added by a member of the Lauder family. This secrecy, she maintained, protected her from the snooping of industry spies hired by her competitors. It also added to the mystique associated with a family owned business. Unlike her competitors such as Elizabeth Arden, Helena Rubenstein, and the Revlon line, she resisted selling out to a corporate conglomerate. Estee Lauder Co. went public and conducted an initial public offering November 17, 1995. Profit from operations for the quarter ending December 31 was $61.1 million compared with a net income of $51.3 million a year earlier.

Lauder entered the family business full time and was running the company in the early 1990s. Her younger son, Ronald, who oversaw the company's foreign operations, left the business in 1983 to serve in the Reagan administration as deputy assistant secretary of defense and as U.S. ambassador to Austria. In 1989 he made an unsuccessful bid for the mayor's office in New York City, spending nearly $12 million in the effort.

According to Forbes magazine, Lauder and both her sons are billionaires. After the death of her husband in 1984, Lauder withdrew from the day-to-day operations of the company to devote her time and energy to her philanthropic work and to a flamboyant social life. The Lauder Foundation makes substantial contributions to the Memorial Sloan Kettering Hospital and to the Joseph T. Lauder Institute for Management and International Studies at the University of Pennsylvania. Lauder was awarded the Crystal Apple Award from the Association for a Better New York, the Gold Medal of the City of Paris, and humanitarian service awards from the Girls Club and the Boy Scouts and Girl Scouts of America.

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This web page was last updated on: 12 December, 2008