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Estée Lauder’s New Ethnic Mix

Estée Lauder is making a dramatic change in its advertising strategy for the first time in its 57-year history by signing its first African-American model.

NEW YORK — Estée Lauder, the world’s second-largest department store beauty brand, is taking a dramatic departure in its advertising strategy for the first time in its 57-year history by signing its first African model.

In a bid to modernize the brand for an increasingly multicultural audience, Estée Lauder has signed model Liya Kebede as the latest face for the brand. Kebede will join Carolyn Murphy, who was signed in September 2001, and Elizabeth Hurley, signed in 1994, in representing Estée Lauder globally.

Hurley has also just renewed her contract with Estée Lauder. While Lauder executives refused to comment on any of the terms of any of the models’ contracts, sources have been quoted as estimating that Murphy earns about $3 million per year on a three-year contract, and that Kebede’s contract will be on a par with Murphy’s. Hurley’s contract was estimated in the British press to be a five-year, $5 million contract.

In the past, the brand’s all-American-looking lineup of models has also included Karen Graham, Paulina Porizkova and Willow Bay. Corporately, however, Lauder was one of the first upscale cosmetics companies to offer a broad-scale multicultural campaign with Prescriptives in 1984.

“Liya brings a lot of things to the brand,” said Patrick Bousquet-Chavanne, group president for the Estée Lauder Cos. “Not only is she helping us to a communicate with a wider audience as our first ethnic model, she also brings a fashion edge to the brand. She is a universal beauty who transcends ethnicity and age, and she connects to the brand on an emotional level. We believe consumers will respond to that.”

Bousquet-Chavanne said that signing Kebede is a continuing evolution in the brand-renewal effort, which began more than a year ago. A number of initiatives have been aimed at freshening the venerable brand, including a new salon-style counter design that made its debut at Bloomingdale’s last year, as well as last spring’s launch of Pure Color, a color cosmetics line with modern-looking clear packaging. “We’re thrilled to report that the new initiatives are showing results on a global scale,” he said. “The renewal process is beginning to deliver dividends, and we’re becoming more confident of the impact on younger consumers. We plan to continue maintaining the pace of the Estée Lauder brand with our building blocks, including packaging design, in-store environment and, of course, our advertising campaigns.”

When asked if Lauder would sign additional ethnic models to expand the brand’s reach in other areas, Bousquet-Chavanne laughed and said: “Let’s let Liya get settled first.”

However, expanding the brand’s reach among the lucrative ethnic market would be a market-building move for a brand whose chief is on a building spree. While market studies vary, the African-American market is said to account for at least 19 percent of cosmetics sales annually, as well as more than 34 percent of hair care product sales.

Bouquet-Chavanne, who assumed control of the brand in the reorganization of Lauder’s senior management in May 2001, has been, as reported, not only deemphasizing the brand’s former promotion-driven strategy, but also looking for new volume potential for the brand — including strengthening its relevancy among younger consumers, particularly those in the 25- to 35-year-old age group.

While brand is estimated to be number two in department store sales to its corporate sister, Clinique, Bousquet-Chavanne has often stated that his goal is to bring the flagship brand of the cosmetics giant back to the top slot. While the publicly held cosmetics firm doesn’t break out the sales figures of individual brands, industry sources estimate that the Estée Lauder brand has a global sales volume of about $2.6 billion at retail, or $1.5 billion wholesale, with about half of that business done in the U.S.

“It’s an important goal of mine, to surprise the consumer,” said Bousquet-Chavanne, who noted that he has a few more surprises in store for the brand. “Going forward, people might not expect some of the attitude and edge you’ll be seeing with the Lauder brand. But I want to arrest people as they are opening the magazines.”

Industry consultant Allan Mottus called the move “a smart choice for the brand.

“It’s good marketing to make everyone feel that they’re included in the brand, and with this move and several others — including broadening shade ranges to appeal to a much wider range of skin tones —?Lauder is being very inclusive,” he said. “And by bringing in a model of color, it gives the brand more edge.”

In fact, said Mottus, the move is a “recognition that Lauder wants to widen the appeal of the brand, something that everyone selling in a department store environment needs to recognize. People may ask, ‘Why aren’t ethnic shoppers buying in department stores?’ But if no one’s speaking to them, why should they? The mass market has already realized this —?now the prestige market has to follow suit. I think now that a major prestige brand like Lauder is reaching out to women of color, other major brands will likely follow suit. This could help the entire department store cosmetics business.” In addition to broadening its reach among African-American consumers, Mottus noted that the brand also is reaching out to the Asian market with new shades.

“Signing Liya opens up a world of possibilities for the brand,” said Aerin Lauder, vice president of global advertising for Estée Lauder, who noted that Kebede would broaden the brand’s reach “to consumers of all ethnicities.” The trio, as a group, “all embody the modern Estée Lauder woman, who is a consumer of many different ages and ethnic groups. We wanted to reflect that in our spokeswomen.”

As the brand was choosing its third model, Kebede’s face kept reappearing domestically and internationally, said Lauder, and “we thought she was a perfect match for the Lauder sensibilities.” Kebede and Murphy also share an agency, IMG, and an agent.

The company has done several test ads with Kebede — one for foundation and one with lipstick —?but the brand is still in the process of finalizing advertising for the remainder of this year, noted Lauder, who said that consumers would “see Liya everywhere by spring 2004. It’s not a set formula yet, but all three of our models will be everywhere next spring,” said Lauder.

“The three models will all have their full place in our strategy, although we can’t give full details yet,” added Bousquet-Chavanne, “although Liya will first be featured this fall on a global basis.”

Kebede, originally from Addis Ababa, Ethiopia, has also appeared in print advertising for Tommy Hilfiger and Revlon, and has appeared in runway shows for Ralph Lauren, Marc Jacobs, Michael Kors, Gucci, Yves Saint Laurent and Balenciaga.

Hurley’s new contract marks the beginning of her ninth consecutive year representing Estée Lauder. Hurley appears primarily in Intuition fragrance advertising — including a new campaign that breaks globally in April fashion, beauty and lifestyle magazines — and travels with Evelyn H. Lauder, senior corporate vice president of the Estée Lauder Cos., to raise awareness for the Breast Cancer Research Foundation, founded by Lauder.

“Great faces sell great products,” said Leonard A. Lauder, chairman of the board for the Estée Lauder Cos., in a statement. “I am delighted with the direction the brand is taking with this announcement.”