By  on December 7, 2004

One era ended and another began this year for the Estée Lauder Cos., one of the most venerable American beauty firms.

The company’s matriarch — and beauty’s grandest dame — Estée Lauder, died April 24 at her Manhattan home, at the age of 95 — or 97, depending upon whom one believes. A few months later, in July, her grandson William Lauder — son of chairman Leonard Lauder and senior corporate vice president Evelyn Lauder — took over as chief executive of the company.

Estée Lauder was, without a doubt, one of the most influential women ever to be a part of the beauty industry. She either invented, developed or established many of the commonly used sales and marketing techniques that serve as today’s mainstay of department store beauty marketing and merchandising — including the ubiquitous gift-with-purchase concept, which ironically was originally developed because her fledgling business didn’t have an advertising budget. (Today, that budget is among the prestige beauty industry’s largest.)

And in a time where glass ceilings were firmly in place for women in business, Estée Lauder went from personally selling a few products to beauty salons in the New York area to founding with husband Joseph in 1946 what would become an international beauty powerhouse, boasting 21 brands and a net sales volume in fiscal 2004 of $5.79 billion. She did so with style, grace and an unshakable faith in herself, her products and her company. Today, the business continues to be a family affair: Both of Lauder’s sons — Leonard, born in 1933, and Ronald, born in 1944 — entered the business, as did her daughters-in-law Evelyn and Jo Carole and three of her four grandchildren.

In fact, in July — just a few months after Estée’s memory was honored by more than 2,000 beauty, media and political heavyweights at a service at Lincoln Center — her grandson William ascended to become ceo. Aerin and Jane, Ronald’s daughters, are senior vice president of global creative directions in the Estée Lauder division and vice president of the BeautyBank division, respectively. Gary, her fourth grandchild and son of Leonard, is managing director of Lauder Partners LLC.

Estée Lauder’s passing and personnel changes have done nothing to slow the company’s momentum: The stage has been set for further growth in both the domestic and global arenas. In January, Lauder’s Designer Fragrances Division signed a deal with pop star Beyoncé Knowles to help market a new women’s fragrance under the Tommy Hilfiger Toiletries banner. The scent, called True Star, launched in the U.S. in September and globally in October.In February, the firm exited the mass market by selling Jane, the color cosmetics brand it had purchased in 1997, to entrepreneurs Harry Adjmi, Alex Adjmi and Lisa Yarnell. In May, it signed a deal with Sean “P. Diddy” Combs to create a prestige beauty and grooming line under Combs’ apparel label, Sean John, with products expected in 2005. Over the summer, the firm began unveiling its long-awaited BeautyBank brands — American Beauty, a color and skin care line with Ashley Judd as its face; Good Skin, a dermatologist-oriented skin care line, and Flirt!, a color cosmetics line with Michelle Branch as its first guest celebrity. The three brands make up Kohl’s new beauty departments, which began rolling out in the retailer’s doors in October.

In September, another high-profile deal — a fragrance brand with billionaire entrepreneur Donald Trump — was revealed, with product hitting Federated doors in mid-November. In 2005, the brand will expand to other U.S. department stores and could go global at that time.

At flagship brand Estée Lauder, North American president Janet Cook retired in September after nearly three decades with the brand. In October, it was announced that John Demsey, president of MAC Cosmetics, would take over as the Estée Lauder brand’s global president, reporting to Patrick Bousquet-Chavanne, one of the beauty giant’s four group presidents. The move was also expected to free up Bousquet-Chavanne — who had been managing the Lauder brand globally as well — to examine worldwide expansion, including possible acquisitions, strategic partnerships, proprietary brands and retail opportunities — as well as still manage MAC Cosmetics, Aramis and the Designer Fragrances Group and the Estée Lauder brand.

In 2005, business in China, independent European pharmacies and proprietary brands are expected to be growth engines, it was noted at the company’s November shareholders meeting. Product categories said to be particularly healthy are color cosmetics, skin care and hair care, while fragrance — as is true of the rest of the industry — continues to be challenging.

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