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Leonard A Lauder once said, “You cannot really run a company unless you have a sense that your company is your family.”
True to what he said, for as long as the Lauders have owned their businesses, they've always seen it as an extension of their family. Since its founding in 1946 with only four products, the family has grown to become a global leader in the deluxe beauty industry. Read on and find out how, through classic advertising campaigns and groundbreaking marketing techniques, the Lauders have built an empire and are a force to reckon with in the cosmetic industry.
How It All Began
Originally from New York, the Lauders are a Jewish family from the United States. Estée Lauder and her husband Joseph H. Lauder, the founders of Estée Lauder Companies, were the driving force behind the brand's early success. It wasn't until the 1930s that Estée Lauder began selling face creams made in her family's stable backyard by her uncle John Schotz, the family's resident chemist.
She visited hair salons and gave free demos to women who were waiting under hair dryers. Using her sales prowess, she converted them into customers. Even though it was first used by Estée Lauder, the gift-with-purchase technique has since been adopted by other brands, accounting for up to 30% of annual sales for some of them. In addition to being a sales genius, she was daring and persistent enough to stop ladies on Fifth Avenue and get them to try her wares. In 1953, Estée Lauder launched Youth Dew, a bath oil and perfume, which cemented the company's place in the public eye.
Each generation of my family brings new dimensions and new energy to what began as a little girl’s insatiable love of beauty in things—Estée Lauder. In the following two decades, she helped establish five further cutting-edge brands — Aramis, Clinique, Prescriptives, Lab Series, and Origins. The company also made licensing partnerships with the likes of Michael Kors, Donna Karan, Tom Ford, and Tommy Hilfiger, to capitalize on the mania for their cosmetics and fragrances. Involving their sons in corporate decisions was a natural progression for Estee and her husband as the privately held company expanded. Leonard Lauder, their eldest son, became CEO in 1982 and nearly doubled sales by 1995 under his leadership.
Now A Billionaire Family
After announcing plans to raise $335 million in an initial public stock offering in the same year, the business raised a total of over $450 million. Since then, the company has been at the forefront of the prestige cosmetics market, setting new standards year after year. It's estimated that Estée Lauder Companies generated $5 billion in annual income at the time of Estée Lauder's death in 2004. As of 2021, the company generated a global net sales of over $16.2 billion and now owns 30 different brands including, but not limited to, Tom Ford Beauty, Too Faced, Becca, CliniqueBobbi Brown, and Glamglow just to name a few.
Having built a profitable business, the Lauders have amassed a sizable net worth as a natural byproduct, becoming one of the richest families in America. Leonard Lauder is estimated to have a net worth of $23.3 billion as of 2022, after spending three decades leading his family's publicly traded cosmetics company. Co-chairing the Alzheimer's Drug Discovery Foundation, he and his brother Ronald have awarded over $150 million to support studies in 19 countries, including the United States, Canada, and the United Kingdom. Ronald S. Lauder, Estée Lauder's youngest son and chairman of Clinique Laboratories, has been in this position since 1994. He is estimated to be worth $5 billion.
The 3rd Generation
William, Aerin, and Jane Lauder, members of the family’s third generation, work closely with corporate executives to help guide the company's future direction and success. William Lauder, the current chairman of Estée Lauder since 2009 has a net worth of $3.8 billion. Aerin Lauder, the heiress to the Estée Lauder brand of skincare, haircare, makeup, and fragrance products, is the eldest daughter of billionaire Ronald Lauder. She serves as the style and image director at the company. In 2012, she founded the luxury lifestyle brand AERIN Beauty which reflects her effortless style and aesthetic point of view. Her estimated net worth is $3.5 billion. Jane Lauder is the executive vice president and chief data officer at Estée Lauder. She is also an Independent Director at Eventbrite Inc and is estimated to be worth $5.5B.
How They Spend Their Millions
Lauder and her husband were involved in philanthropic activities, including contributions to New York's Memorial Sloan-Kettering Hospital and the University of Pennsylvania, which houses the Joseph H. Lauder Institute of Management and International Studies. The American Cancer Society honored them by naming the Lauder Institute at New York-Presbyterian Hospital in their honor in 1991. Its goal is to improve patient care by advancing medical science.
Today, the Lauder family continues to make charitable contributions to projects that they support such as health, education, and arts. One example is the Museum of Modern Art's International Center for Photography, which was established in 2010. The goal of this institution is to help new artists from all around the world.
Source: Forbes, Estée Lauder co., Daily mail, Investopedia
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