William P. Lauder appeared as part of a Newsmaker Forum of the Cosmetic Executive Women Wednesday evening in a freewheeling question-and-answer session centering on brand building and distribution strategy.
NEW YORK — William P. Lauder, president and chief executive officer of the Estée Lauder Cos. Inc., appeared as part of a Newsmaker Forum of the Cosmetic Executive Women Wednesday evening in a freewheeling question-and-answer session centering on brand building and distribution strategy, with some thoughts on talent development and leadership thrown in. The session, which lasted more than an hour, drew a crowd of 400 at the Harmonie Club and was moderated by Jill Scalamandre, chief marketing officer of Chrysallis, a portfolio company of the private equity firm Catterton Partners.
Scalamandre opened with a question about how Lauder's company decides whether to build a brand from scratch or acquire one already established. Lauder noted that in the early Nineties, his company had a chance to buy MAC Cosmetics, but passed up the opportunity, believing the $10 million could be better spent elsewhere. A year later, Lauder changed its mind "and paid a lot more," he noted, adding that "we could have invested less (in a start-up), but it wouldn't have been the leader and it wouldn't have been the original. It would have been an also-ran." He stressed, "In buying a brand, you spend a lot more money, but at a substantially less risk profile. Starting a brand means less money but greater risk."
Scalamandre tried to coax Lauder into classifying his brands as "emerging, developing or developed." He began by describing the visionary positioning of Clinique, then stopped short by declaring, "We love all our children."
Asked about challenges, Lauder quickly replied that the industry is grappling with a fragrance business in flux. "We are more and more guilty of throwing spaghetti against the wall and seeing if it sticks," Lauder said. "It's crazy and we are doing it to ourselves."
On the subject of competition, he admitted that it is not the obvious enemies that he fears most. "It's the new competitors that are not on your radar screen," who can come up with new and unique concepts, like StriVectin, that can make the major players scramble and play catch-up. As for the consolidation of department stores in the U.S. and resultant distribution shift, Lauder noted the industry has been shifting to a multichannel reality, with varying degrees of successes. Referring to well-established brands with large consumer followings in the department store anchors of malls, he noted, "those with the deepest roots (in core anchors) are having the hardest time transforming."As for hot foreign markets, Lauder said China is still barreling along and Vietnam, a country of 70 million people, "is booming." Clinique has been there for a decade and the Lauder brand is being established.
His view on what's needed to manage people successfully is first an ability to communicate. "You can't be a great leader if you can't communicate," he said, adding that the biggest pitfall is intimidation. Lauder said he sees young people with ideas and imagination who are too shy to speak up in meetings. This fear is often compounded by a "lack of curiosity about the rest of the world." He concluded that the future belongs not to his generation, but to "people in their 20s who have great ideas."
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