Estée Lauder Companies

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The Estée Lauder Companies Inc.
Public
Traded as NYSEEL
S&P 500 Component
Industry Cosmetics
Founded New York City, New York, United States (1946)
Founders Estée Lauder
Joseph Lauder
Headquarters General Motors Building
New York City, New York, United States
Key people
William P. Lauder
(Executive Chairman)
Fabrizio Freda
(President and CEO)
Products Skin care, Makeup, Fragrance and Haircare
Revenue IncreaseUS$11.26 billion (2016)[1]
IncreaseUS$1.61 billion (2016)[2]
IncreaseUS$1.11 billion (2016)[3]
Total assets IncreaseUS$9.22 billion (2016)[4]
Total equity DecreaseUS$3.57 billion (2016)[5]
Number of employees
46,000 (June 2016)[6]
Website elcompanies.com

The Estée Lauder Companies Inc. (/ˈɛst ˈlɔːdər/) is an American manufacturer and marketer of prestige skincare, makeup, fragrance and hair care products. The company owns a diverse portfolio of brands, distributed internationally through retail channels and digital commerce, and has its headquarters in Midtown Manhattan, New York City.

History[edit]

The company began in 1946 when Estée Lauder and her husband Joseph Lauder 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. Two years later, in 1948 they established their first department store account with Saks Fifth Avenue in New York.

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.[7] In 1967, Estée Lauder herself was named one of ten Outstanding Women in Business in the United States by business and financial editors[citation needed]. This was followed by a Spirit of Achievement Award from Albert Einstein College of Medicine at Yeshiva University in 1968. In that year, the company expanded again, opening Clinique Laboratories, Inc. Clinique was the first dermatologist guided (Dr. Norman Orentreich), allergy tested, fragrance-free cosmetic brand created by Estée Lauder.

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, an Italian fashion house (1995), and with American fashion designer Donna Karan (1997).[8]

Brand acquisitions began with an investment in the Toronto-based M•A•C 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 renowned fragrance house Jo Malone London was acquired in 1999.[9]

On November 17, 1995, The Estée Lauder Companies went public on the New York Stock Exchange, at $26.00 a share ($13.00 post-split). [10]

The Estée Lauder brand has had sometimes iconic 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, 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.[11] In 2015, Estée Lauder signed model and social media sensation Kendall Jenner to introduce a new generation of beauty enthusiasts to the brand. [12]

Acquisitions and licensing continued in the 2000s as The Estée Lauder Companies bought a majority interest in Bumble & bumble, the trendy hair care salon, 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. [13]

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).[14]

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.[15]

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 renowned for its "Luxury Face Oil," and Le Labo, a fragrance and sensory lifestyle brand. In 2015, the Company acquired Editions de Parfums Frédéric Malle, a fragrance brand, and GLAMGLOW, a Hollywood skin care brand.[16]

In 2016, the company acquired Becca Cosmetics, their first color cosmetic group acquisition since Smashbox in 2010.[17] In November 2016, the company made its largest acquisition to date by acquiring California-based cosmetics company Too Faced for USD$1.45 billion.[18]

In January 2017, at the 31st Annual Beauty Excellence Awards ceremony hosted by woman's magazine Marie Claire, Estée Lauder Companies was awarded the Research and Innovation award for its Advanced Night Repair Concentrated Recovery Powerfoil Mask; Advanced Night Repair Intensive Recovery Ampoules; and Revitalizing Supreme + Global Anti-Aging Wake Up Balm.[19]

Operations and finances[edit]

Finances[edit]

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 last year, and diluted net earnings per common share rose 5% to $2.96, compared with $2.82 reported in the prior year.[20]

Board of Directors[edit]

Current members of the Board of Directors of Estée Lauder Companies Inc. are: Charlene Barshefsky, Rose Marie Bravo, Lynn Forester de Rothschild, Fabrizio Freda, Paul J. Fribourg, Wei Sun Christianson, Mellody Hobson, Irvine Hockaday, Jane Lauder, Leonard A. Lauder, Ronald S. Lauder, William P. Lauder, Richard Parsons, Barry Sternlicht and Richard F. Zannino. [21]

Executive management[edit]

Leonard A. Lauder is Chairman Emeritus. William P. Lauder is Executive Chairman. Fabrizio Freda is President and Chief Executive Officer.[22]

Breast Cancer Awareness Campaign (BCA)[edit]

In October 1992, the BCA campaign was launched by Evelyn Lauder (Estée's daughter in law) who co-created the "Pink Ribbon" 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 18 brands that make up the Estée Lauder Companies. They collectively represent The Breast Cancer Research Foundation’s first and largest corporate supporter. Estée's daughter-in-law created BCRF's signature pink ribbon.

Over $10 million were raised for the Breast Cancer Research Foundation between 1993 and summer 2003. Another $1 million were raised from their retail partners between July 2002 and summer 2003.[23]

Brands[edit]

The Estée Lauder Companies brands include:[24]

Controversies[edit]

SOPA[edit]

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.[28][29]

Child labor[edit]

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.[citation needed] The company immediately moved to terminate the contract with the manufacturer it had been in business with for 5 years, claiming it was totally unaware prior to the initial inspection.

Other[edit]

Boycott and anti-boycott[edit]

Since at least February 2001, Estée Lauder and its brands have been the target of a boycott campaign. The boycott has been led by pro-Palestinian activists who have targeted the corporation because of the pro-Israel activities of Ronald Lauder.[30][31] In June 2003, the San Francisco-based Queers Undermining Israeli Terrorism (QUIT) took up the boycott with their "Estée Slaughter" campaign.[32] The boycott has generated an anti-boycott campaign by supporters of Israel.[33]

Animal testing[edit]

The Estée Lauder Companies performs non-animal and human volunteer testing to assess product safety and efficacy. The Estée Lauder Companies does not perform animal testing, except where required by law. The Chinese government requires testing on animals for many cosmetic products.[34] This causes controversy for smaller brands that are "cruelty free" but were bought out by Estée Lauder. Estée Lauder becomes the parent company of the smaller brand and profits through the smaller brand. Customers are concerned that by continuing to purchase from these previously cruelty free brands that they may contributing to animal testing via parent companies.

References[edit]

  1. ^ https://finance.yahoo.com/quote/EL/financials?p=EL
  2. ^ https://finance.yahoo.com/quote/EL/financials?p=EL
  3. ^ https://finance.yahoo.com/quote/EL/financials?p=EL
  4. ^ https://finance.yahoo.com/quote/EL/financials?p=EL
  5. ^ https://finance.yahoo.com/quote/EL/financials?p=EL
  6. ^ https://otp.tools.investis.com/clients/us/estee_lauder1/SEC/sec-show.aspx?FilingId=11561623&Cik=0001001250&Type=PDF&hasPdf=1
  7. ^ http://www.elcompanies.com/who-we-are/key-moments#1964-aramis
  8. ^ http://www.elcompanies.com/who-we-are/key-moments
  9. ^ http://www.elcompanies.com/who-we-are/key-moments
  10. ^ http://www.elcompanies.com/who-we-are/key-moments
  11. ^ "The New Faces of Beauty: Of the Minute". models.com. Retrieved 2010-04-16. 
  12. ^ http://fashionista.com/2014/11/kendall-jenner-estee-lauder
  13. ^ http://www.elcompanies.com/who-we-are/key-moments
  14. ^ "ESTÉE LAUDER COMPANIES - Investor Relations - News Release". Investors.elcompanies.com. Retrieved 2015-07-17. 
  15. ^ "ESTÉE LAUDER COMPANIES - Investor Relations - News Release". Investors.elcompanies.com. Retrieved 2015-07-17. 
  16. ^ "Fact Sheet FY 2014". Elcompanies.com. Retrieved 2015-07-17. 
  17. ^ https://www.elcompanies.com/news-and-media/newsroom/company-features/2016/welcoming-becca-to-the-estee-lauder-companies
  18. ^ "Did Too Faced Founders Cash Out Too Early? Sale To Estee Lauder Suggests Yes". Forbes.com. 2016-11-15. Retrieved 2017-02-15. 
  19. ^ https://globalcosmeticsnews.com/europe/3869/31st-marie-claire-beauty-excellence-awards-recognises-industry-talent
  20. ^ http://www.elcompanies.com/~/media/Files/E/Estee-Lauder/investors/toolkit/4qtr16.pdf
  21. ^ "ESTEE LAUDER COMPANIES-CL A (EL:New York): Board of Directors - Businessweek". Investing.businessweek.com. Retrieved 2015-07-17. 
  22. ^ "Our Leaders". Elcompanies.com. Retrieved 2015-07-17. 
  23. ^ "Summer 2003 BCRF newsletter: Estée Lauder Companies Update". Web. April 4, 2005. Archived from the original on April 4, 2005. Retrieved May 22, 2011. 
  24. ^ "Our Brands". Elcompanies.com. 2011-03-22. Retrieved 2015-07-17. 
  25. ^ http://elcompanies.com/Pages/PressReleaseStory.aspx?ReleaseId=1855
  26. ^ "Why Estee Lauder Is Buying This Cosmetics Brand for $1.45 Billion". Fortune. 15 November 2016. Retrieved 15 November 2016. 
  27. ^ "The Estée Lauder Companies Acquires RODIN olio lusso". Elcompanies.com. 2014-10-31. Retrieved 2015-07-17. 
  28. ^ "All the Companies Supporting SOPA, the Awful Internet Censorship Law—and How to Contact Them". Gizmodo.com. Retrieved 2015-07-17. 
  29. ^ "List of Supporters: H.R. 3261, the Stop Online Piracy Act" (PDF). Judiciary.house.gov. Retrieved 2015-07-17. 
  30. ^ "Boycott Israel Campaign". Retrieved August 6, 2006. 
  31. ^ "American Muslims for Jerusalem have called for a boycott of Estee Lauder products". Snopes. Retrieved August 6, 2006. 
  32. ^ "Queers Undermining Israeli Terrorism". Retrieved August 6, 2006. 
  33. ^ "Armchair Activist: Buy Estee Lauder Products". May 11, 2001. Archived from the original on June 7, 2002. Retrieved August 6, 2006. 
  34. ^ [1]

External links[edit]

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