Estee Lauder

Estee Lauder (née Josephine Esther Menzer, bornabout 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 neighbors 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 traveled 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.


Further Reading on Estee Lauder

The best sources of additional information on Estee Lauder can be found in her autobiography, Estee, A Success Story (1986), and in Israel Lee, Estee Lauder. Beyond the Magic (1985). There have been articles about the woman and her company in several periodicals, including Who's Who in America, 1984-85, New York Times Sunday Magazine (December 8, 1985), New Yorker (September 15, 1986), Vogue (January 1986), Forbes (September 18, October 23, and November 13, 1989), and Business Week (September 4, 1989).