The Estée Lauder Companies

The Estée Lauder Companies Inc.
Company typePublic
IndustryCosmetics
Founded1946; 78 years ago (1946)
New York, New York, U.S.
Founders
HeadquartersGeneral Motors Building
New York, New York, U.S. 10153
Key people
Products
  • Skin care
  • makeup
  • perfume
  • hair care
RevenueIncrease US$17.737 billion (Fiscal Year Ended June 30, 2022)[1]
Increase US$3.170 billion (Fiscal Year Ended June 30, 2022)[1]
Decrease US$2.408 billion (Fiscal Year Ended June 30, 2022)[1]
Total assetsDecrease US$20.910 billion (Fiscal Year Ended June 30, 2022)[1]
Total equityDecrease US$5.590 billion (Fiscal Year Ended June 30, 2022)[1]
OwnerLauder family (38% common stock, 86% voting power) [2]
Number of employees
approx. 63,000 (As of June 30, 2022)[1]
Websitewww.elcompanies.com
Footnotes / references
[1][2]

The Estée Lauder Companies Inc. (/ˈɛsteɪ ˈlɔːdər/ EST-ay LAW-dər; stylized as ESTĒE LAUDER) is an American multinational cosmetics company, a manufacturer and marketer of makeup, skincare, perfume, and hair care products, based in Midtown Manhattan, New York City. It is the second largest cosmetics company in the world after L'Oréal. The company owns a diverse portfolio of brands, including La Mer, Jo Malone London, Clinique and Tom Ford Beauty, among many more, distributed internationally through both digital commerce and retail channels.

History

Founders Estée and Joseph H. Lauder in 1971

The company began in 1946 when Estée Lauder and her husband Joseph began producing cosmetics in New York City. They first carried only four products: Cleansing Oil, Skin Lotion, Super Rich All-purpose Creme, and Creme Pack.[3] Two years later, in 1948 they established their first department store account with Saks Fifth Avenue in Manhattan.

Over the next 15 years, they expanded the range and continued to sell their products in the United States. In 1960, the company started its first international account in the London department store Harrods. The following year it opened an office in Hong Kong.

In 1964, they introduced Aramis, a line of fragrance and grooming products for men named after an exotic Turkish root originally used as an aphrodisiac.[4] In 1967, Estée Lauder herself was named one of ten Outstanding Women in Business in the United States by business and financial editors.[5] This was followed by a Spirit of Achievement Award from Albert Einstein College of Medicine at Yeshiva University in 1968.[citation needed] In that year, the company expanded again, opening Clinique, a dermatologist-guided (Dr. Norman Orentreich), allergy-tested, fragrance-free cosmetic brand.

Estée Lauder's Clinique brand became the first women's cosmetic company to introduce a second line for men when, in 1976, they began a separate line called "Skin Supplies for Men", which continues to be sold at Clinique counters worldwide. In 1981, the company's products became available in the Soviet Union.

In the 1990s, brand acquisitions and licensing agreements contributed to explosive growth as the company transformed from a family-owned business to a publicly traded, family-controlled organization. The decade opened with the creation of Origins – the first wellness brand in U.S. department stores. The first licensing agreement for fragrances was with fashion designer Tommy Hilfiger in 1993, followed by Kiton,[6] an Italian fashion house (1995), and with American fashion designer Donna Karan (1997).[7]

Brand acquisitions began with an investment in the Toronto-based MAC Cosmetics in 1994, which the company then acquired in 1998. Bobbi Brown Cosmetics, designed by the celebrated makeup artist, was acquired in 1995, as was La Mer – along with the original recipe for its supreme luxury product, Crème de la Mer, containing the nutrient-rich Miracle Broth. The company ventured into its first hair care and holistic beauty brand with Aveda in 1997. The fragrance house Jo Malone London was acquired in 1999.[7]

On November 16, 1995, the Estée Lauder Companies went public on the New York Stock Exchange at $26.00 a share ($6.50 on a post-split basis).[8]

Acquisitions and licensing continued in the 2000s as the Estée Lauder Companies bought a majority interest in the hair salon Bumble and bumble and completed its acquisition in 2006; an exclusive global licensing agreement was signed with fashion designer Michael Kors (2003). Designer Tom Ford begins a project with the company and later an agreement was signed with him (2005) to develop and distribute fragrances and cosmetics under the Tom Ford Beauty brand.[7]

On July 1, 2010, the company acquired Smashbox Beauty Cosmetics, Inc., a brand created in Smashbox Studios in Culver City, California, by brothers Dean and Davis Factor (as in Max).[9]

The large Estée Lauder cosmetics counter at MYER Sydney City
Small-medium-sized pre-2013 style counter at New Zealand retailer Farmers

On October 28, 2011, Aramis and Designer Fragrances, a division of the Estée Lauder Companies Inc., and Tory Burch LLC announced the signing of a multiyear agreement for the exclusive worldwide license of the Tory Burch fragrance business. This partnership marked Tory Burch's first step into the beauty industry. The first Tory Burch fragrance products were introduced in 2013.[10]

In 2012, the company launched AERIN Beauty, a luxury lifestyle beauty and fragrance brand inspired by the signature style of its founder, Aerin Lauder.

In 2014, the company acquired two insider beauty brands, RODIN olio lusso, a skin care brand known for its "Luxury Face Oil", and Le Labo, a fragrance and sensory lifestyle brand. Later that year, the company also made its first investment in India by buying a minority stake in Forest Essentials, a luxury cosmetics company specializing in Ayurvedic products.[11] In 2015, the company acquired Editions de Parfums Frédéric Malle, a fragrance brand, and GLAMGLOW, a Hollywood skin care brand.[12]

In 2016, the company acquired Becca Cosmetics, its first color cosmetic group acquisition since Smashbox in 2010.[13] In November 2016, the company made its largest acquisition to date by acquiring California-based cosmetics company Too Faced for US$1.45 billion.[14]

In 2019, the company acquired Dr. Jart+. Founded in Korea in 2004, Dr. Jart+ pioneered the invention of BB Cream, setting the standard for multifunctional beauty.[15]

In 2021, the company acquired Canadian-based Deciem Beauty Group Inc.[16] In 2022, Estée Lauder opened a 300,000 sq ft. distribution center in Galgenen, Switzerland.[17]

In November 2022, the company announced it was to acquire the designer fashion house Tom Ford in a deal worth $2.8bn, with Ford remaining as creative director until at least 2023.[18]

Response to the COVID-19 pandemic

In response to the COVID-19 pandemic the Estée Lauder Companies announced on August 20, 2020, a reduction in their workforce by 1,500 to 2,000 personnel worldwide, or about 3 percent of total employees. Most of the reductions will be support workers and store employees. The company also announce they would be closing approximately 10 to 15 percent of their stores, close in-store beauty counters, and focus more on digital operations.[19]

Marketing

The Estée Lauder company has many brands and Estée Lauder is one of the brands. It has had sometimes high-profile spokesmodels, sometimes referred to simply as 'faces'. Past 'faces' for Estée Lauder include Karen Graham, Bruce Boxleitner, Shaun Casey, Willow Bay, Paulina Porizkova, Elizabeth Hurley, Carolyn Murphy, supermodel Liya Kebede – the first African 'face' of Estee Lauder, Anja Rubik, and actress Gwyneth Paltrow. As of 2008 the main spokesmodel for Estée Lauder was supermodel Hilary Rhoda. In 2010, the company added three more faces to the roster, Chinese model Liu Wen, Puerto Rican model Joan Smalls, and French model Constance Jablonski.[20]

In 2015, Estée Lauder signed model Kendall Jenner to promote the brand.[21]

In 2017, the company announced Violette Serrat as their Global Beauty Director.[22]

Alvin Chereskin, the founder of AC&R, was the long-time creative partner of the company.[23]

Operations and finances

Finances

For fiscal year 2016, the Estée Lauder Companies achieved net sales of $11.26 billion, a 4% increase compared with $10.78 billion in the prior year. Net earnings for the year were $1.11 billion, a 2% increase compared with $1.09 billion in the previous year, and diluted net earnings per common share rose 5% to $2.96, compared with $2.82 reported in the prior year.[24] As of 2018, Estée Lauder Companies ranked 258 on the Fortune 500 list of the largest United States corporations by revenue.[25]

Executive management

Leonard A. Lauder is chairman emeritus. William P. Lauder is executive chairman. Fabrizio Freda is president and chief executive officer.[26]

Breast Cancer Awareness campaign

In October 1992, the Breast Cancer Awareness campaign was launched by Evelyn Lauder (Estée's daughter-in-law) who co-created the "Pink Ribbon"[27] with Self magazine as a symbol of breast health. Since then, millions of people globally have heard the message about the importance of breast health and early detection can save lives. The Estée Lauder Companies' annual Breast Cancer Awareness campaign involves all of the 19 brands that make up the Estée Lauder Companies. They collectively represent The Breast Cancer Research Foundation's first and largest corporate supporter.

Since 1992, the Estée Lauder Companies' Breast Cancer campaign has raised more than $89 Million globally for lifesaving research, education, and medical services.[28]

Environmental activism

In November 2022, Estée Lauder Companies pledged £100,000 ($115,453) to investigate water quality in Windermere, the largest lake in England. The company has also pledged £500,000 ($577,222) over the next five years that will be used to fund the pioneering nature restoration projects that will be carried out across multiple UK National Parks.[29]

Brands

The Estée Lauder Companies brands include:[30]

Controversies

SOPA

Estée Lauder Companies appeared on lists of major companies supporting SOPA, the controversial, but unsuccessful, Congressional anti-piracy bill that was considered overreaching by critics.[32][33]

Child labor

In 2001, it was reported that children were discovered working in a factory in Cambridge, New York, making products for Origins, one of Estee Lauder's natural products brands. The contracted company was Common Sense Natural Soap & Bodycare, owned by a group led by cult leader Yoneq Gene Spriggs. Estee Lauder said it immediately moved to terminate the contract with the manufacturer it had been in business with for 5 years, stating it was totally unaware prior to the initial inspection.[34]

Animal testing

The Estée Lauder Companies perform non-animal and human volunteer testing to assess product safety and efficacy. Estée Lauder Companies product goes through animal testing where required by law by its country government. The Chinese government requires testing on animals for many cosmetic products.[35] This causes controversy for smaller brands that are "cruelty free" but were acquired by Estée Lauder.[36]

Boycott and anti-boycott

QUIT activists protesting Estée Lauder Companies, 2004.

Since at least February 2001, Estée Lauder and its brands have been the target of a boycott campaign led by pro-Palestine activists who have targeted the corporation because of the pro-Israel activities of Ronald Lauder.[37][38] In June 2003, the San Francisco-based Queers Undermining Israeli Terrorism (QUIT) took up the boycott with their "Estée Slaughter" campaign.[39] The boycott has generated an anti-boycott campaign by supporters of Israel.[40]

Inclusion, diversity and equity

The Estée Lauder Companies (ELC) is globally recognized for its commitment to fostering Inclusion, Diversity, and Equity (ID&E) within its organizational framework. With a goal to be the most inclusive and diverse beauty company worldwide, ELC places people at the forefront, extending respect and care to its employees, communities, and consumers across approximately 150 countries.

Core Values and Vision:

Grounded in respect for individuality, a culture of belonging, and the enduring values of inclusion, diversity, equity, and engagement, ELC stands as a beacon for a workplace that prioritizes the diverse strengths and talents of its global workforce.

Definitions of Inclusion, Diversity & Equity:

ELC defines inclusion as the creation of an environment that recognizes, values, and respects individual differences, encouraging authenticity. Diversity is embraced as a spectrum of characteristics, attributes, and experiences that shape identities and fuel perspectives. Equity, a fundamental pillar, signifies the fair treatment of all, eliminating disparities in access to resources, benefits, and opportunities.

Commitment to Racial Equity:

In pursuit of racial equity, ELC actively engages in listening, learning, and fostering internal advocacy. It is dedicated to ensuring more equitable access to professional development and advancement for its Black employees, accurate representation of the Black experience in the creative process, and significant support for Black-owned businesses.

Gender Equity and Women's Advancement:

Building upon the legacy of its founder, Mrs. Estée Lauder, ELC is committed to advancing women within its organization and globally.With a workforce of 80% women and over 50% women in leadership, ELC supports gender equality, providing equal access to job opportunities, leadership positions, health, education, and economic participation.

Global Diversity Council and Employee Resource Groups:

The Global Diversity Council, established in 2009, plays a pivotal role in guiding ELC's ID&E priorities. Comprising 24 senior leaders and led by Executive Chairman William P. Lauder and President/CEO Fabrizio Freda, the council is instrumental in tracking and reporting progress. ELC's Employee Resource Groups (ERGs) foster a culture of inclusion, offering support, networking, and community-building across diverse interests, ensuring that all employees, regardless of background, feel a sense of belonging.[41]

Marilu Marshall

Marilu Marshall serves as the Senior Vice President, Executive Management, and Chief Inclusion & Diversity Officer for The Estée Lauder Companies, overseeing the enterprise-wide Inclusion & Diversity (I&D) program. Working closely with executive management, Marshall plays a crucial role in various business matters. Her commitment to I&D is deeply personal, rooted in her identity as a first-generation American born into a Cuban family. In her current capacity, she is responsible for embedding the company’s longstanding I&D values throughout the organization, shaping its culture, and influencing its business practices.[42]

Joining the company in 1998, Marshall initially held the position of Vice President of Human Resources for North America. Her dedication and contributions led to her promotion to Senior Vice President of Global Human Resources in 2006, eventually assuming her current role in 2017.

Marshall brings a wealth of experience and a sophisticated understanding of the importance of diverse backgrounds, perspectives, and experiences. Her career journey is diverse in itself, starting as a trial attorney with the Organized Crime and Racketeering Section of the United States Department of Justice. She continued her government service as the Deputy Director of the Commission on the Review of the National Policy Toward Gambling—a joint Congressional and Presidential Commission. Transitioning to the private sector, Marshall held roles like Senior Vice President and General Counsel for the luxury shipping company Cunard Line, Ltd and more.

As the first woman in her family to attend college, Marshall's commitment to education is evident through her current role as a member of the Board of Trustees of the University of Miami. She also actively contributes to the Board’s Academic Affairs Committee.[43]

Nicole Monson

As of December 1st, 2023, Estée Lauder Companies (ELC) is overseen by Nicole Monson as the leader of the Equity and Engagement Center of Excellence (COE). In her capacity as Senior Vice President, Equity and Engagement, Nicole reports directly to Michael O’Hare, Executive Vice President of Global Human Resources.

Nicole Monson is a vital member of ELC’s Senior Leadership Team, contributing significantly to the formulation of the company's long-term Equity and employee Engagement strategy. Her responsibilities extend across all business areas, focusing on developing enterprise-wide capabilities and implementing proactive initiatives to foster Equity and Engagement. The overarching objective is to create a workforce that is representative and responsive to individuals of diverse backgrounds, ensuring equal opportunities for success.

Nicole brings extensive experience, particularly in providing strategic legal counsel on a range of employment and compliance matters. In her prior role as Senior Vice President, Deputy General Counsel, Global Employment, Ethics, and Legal Privacy, she oversaw global legal strategies related to employment, ethics, and privacy. Her role aimed at protecting the company’s interests amidst evolving legal landscapes, digital platform growth, global acquisitions, and an increasingly complex regulatory environment.

Since joining ELC in 2014 as Vice President, Employment Counsel, Nicole’s role has evolved, reflecting her adaptability and willingness to take on new responsibilities. Beyond her official capacities, Nicole has contributed to ELC’s organizational culture, participating in Employee Resource Groups such as the ‘Network of Black Leaders & Executives’ and the ‘Women’s Leadership Network.’ Her commitment to fostering a culture of respect, inclusivity, and belonging is further evident in her role as Executive Sponsor of She’s Howard: Own Your Power—a partnership between ELC and Howard University aimed at supporting the success of the university's alumnae.

Nicole Monson is recognized as an influential figure within ELC and a thought leader. Her engagements as a guest speaker for various organizations underscore her expertise. Notably, she has been selected for inclusion in the National Black Lawyers Top 100, an acknowledgment of lawyers for outstanding legal representation.

Ms. Monson holds a BA in Economics, cum laude, from Spelman College and a JD, cum laude, from Howard University School of Law. Her academic achievements, combined with her professional contributions, underscore her commitment to excellence and leadership within Estée Lauder Companies.[44]

Employee Resource Groups

The ERG's at Estée Lauder Companies include:

  • AAG: Asian and Pacific Islander ERG
  • Elevate: Administrative Professionals ERG
  • Families at Work ERG
  • GenNEXT: Millennials and Gen-Z ERG
  • HI-C: Hispanic Connections ERG
  • Kindred: Disability and Mental Health ERG
  • Mental Health and Wellbeing ERG
  • Men's ERG
  • MENA: Middle Eastern and North African ERG
  • NOBLE: Network of Black Leaders and Executives ERG
  • wELCome: LGBTQIA+ ERG
  • WISE: Wisdom, Innovation & Spirit of ELC
  • Women’s Leadership Network
  • Veterans ERG[45]

References

  1. ^ a b c d e f g "The Estée Lauder Companies Inc. 2022 Annual Form 10-K Report" (PDF). elcompanies.com. 30 June 2022. Retrieved 3 April 2023.
  2. ^ a b "The Estée Lauder Companies Ownership Profile". elcompanies.com. Retrieved 3 April 2023.
  3. ^ Howerton, Ashley Brooke. "The Estee Lauder Companies Background and History". University of Tennessee.
  4. ^ Aramis elcompanies.com
  5. ^ "Cosmetics billionairess, Estée Lauder, dies". www.bizcommunity.com. Retrieved 2020-03-14.
  6. ^ Kiton elcompanies.com
  7. ^ a b c Who we are: Key moments elcompanies.com
  8. ^ Investors elcompanies.com
  9. ^ "ESTÉE LAUDER COMPANIES - Investor Relations - News Release". Investors.elcompanies.com. Retrieved 2015-07-17.
  10. ^ "ESTÉE LAUDER COMPANIES - Investor Relations - News Release". Investors.elcompanies.com. Retrieved 2015-07-17.
  11. ^ "Estee Lauder to up stake in Forest Essentials". Economictimes.indiatimes.com. 2014-12-18. Retrieved 2020-01-04.
  12. ^ "Fact Sheet FY 2014". Elcompanies.com. Retrieved 2015-07-17.
  13. ^ "Welcoming BECCA to The Estée Lauder Companies". www.elcompanies.com.
  14. ^ "Did Too Faced Founders Cash Out Too Early? Sale To Estee Lauder Suggests Yes". Forbes. 2016-11-15. Retrieved 2017-02-15.
  15. ^ "Dr. Jart+". www.elcompanies.com. Retrieved 2020-08-17.
  16. ^ "The Estée Lauder Companies to Increase Its Ownership in DECIEM". www.elcompanies.com. Retrieved 2021-08-29.
  17. ^ Caldwell, Georgina (2022-06-13). "The Estee Lauder Companies cuts ribbon on new distribution center for travel retail channel". Global Cosmetics News. Retrieved 2022-06-13.
  18. ^ "Estee Lauder to buy designer brand Tom Ford". BBC News. BBC. Retrieved 16 November 2022.
  19. ^ Bhasin, Kim; Porter, Gerald Jr. (2020-08-20). "Estee Lauder to Trim 3% of Global Workforce to Curb Costs". Bloomberg Business. Retrieved 2020-08-20.
  20. ^ "The New Faces of Beauty: Of the Minute". models.com. Retrieved 2010-04-16.
  21. ^ Kendall Jenner and Estée Lauder fashionista.com November 2014
  22. ^ Jensen, FashionNetwork.com,Emily. "Violette named new global beauty director for Estée Lauder". FashionNetwork.com. Retrieved 2018-11-29.{cite news}: CS1 maint: multiple names: authors list (link)
  23. ^ Elliott, Stuart (1995-12-15). "THE MEDIA BUSINESS: Advertising;Alvin Chereskin, a longtime force in beauty advertising, gives up retirement for Fresh Carats". The New York Times. ISSN 0362-4331. Retrieved 2020-03-05.
  24. ^ http://www.elcompanies.com/~/media/Files/E/Estee-Lauder/investors/toolkit/4qtr16.pdf[bare URL PDF]
  25. ^ "Estee Lauder". Fortune. Retrieved 2018-11-25.
  26. ^ "Our Leaders". Elcompanies.com. Retrieved 2015-07-17.
  27. ^ "Breast Cancer Awareness | Estée Stories Blog". esteelauder.com. Retrieved 2020-01-04.
  28. ^ "The Breast Cancer Campaign". www.elcompanies.com. Retrieved 2020-08-17.
  29. ^ "Estée Lauder pledges money to help Windermere". BBC News. Retrieved 2022-11-09.
  30. ^ "Our Brands". Elcompanies.com. 2011-03-22. Retrieved 2015-07-17.
  31. ^ "Why Estee Lauder Is Buying This Cosmetics Brand for $1.45 Billion". Fortune. 15 November 2016. Retrieved 15 November 2016.
  32. ^ "All the Companies Supporting SOPA, the Awful Internet Censorship Law—and How to Contact Them". Gizmodo.com. Retrieved 2015-07-17.
  33. ^ "List of Supporters: H.R. 3261, the Stop Online Piracy Act" (PDF). Judiciary.house.gov. Archived from the original (PDF) on 2011-12-27. Retrieved 2015-07-17.
  34. ^ Jeane MacIntosh (April 9, 2001). "State probes cult in child-labor scandal – acting on heels of post report". New York Post. Retrieved April 9, 2018.
  35. ^ "In China, big cosmetics firms are selling products tested on animals". CNBC. Retrieved April 1, 2018.
  36. ^ "These Beauty Brands Are Still Tested on Animals". PETA. 2015-07-22. Retrieved 2022-01-31.
  37. ^ "Boycott Israel Campaign". Retrieved August 6, 2006.
  38. ^ "American Muslims for Jerusalem have called for a boycott of Estee Lauder products". Snopes. May 30, 2002. Retrieved August 6, 2006.
  39. ^ "Queers Undermining Israeli Terrorism". Archived from the original on July 8, 2006. Retrieved August 6, 2006.
  40. ^ "Armchair Activist: Buy Estee Lauder Products". May 11, 2001. Archived from the original on June 7, 2002. Retrieved August 6, 2006.
  41. ^ "Inclusion, Diversity & Equity". www.elcompanies.com. Retrieved 2023-12-05.
  42. ^ "Cosmetic Executive Women".
  43. ^ "University of Miami Alumni" (PDF).
  44. ^ "Nicole Monson". Concordia. Retrieved 2023-12-05.
  45. ^ "$name". www.elcompanies.jp. Retrieved 2023-12-05.

External links

40°45′49″N 73°58′22″W / 40.76361°N 73.97278°W / 40.76361; -73.97278