LAUDER’S NEW MANAGEMENT MATRIX

Byline: Pete Born

NEW YORK — With the realignment of top managers early this week at Estee Lauder Cos., one of the beauty industry’s most accomplished and widely respected executives has taken the helm of the nation’s largest-volume prestige brand.
At least that is how the nation’s top department store retailers view the appointment of Daniel J. Brestle to president of Estee Lauder USA & Canada. He succeeds Robin Burns, who resigned to take a new post at The Limited.
This week, Brestle was still getting used to the idea of running the business against which he competed for years. For the last four years, Brestle has been the in-house rival of Lauder as the president of Clinique USA & Canada, the company’s and the industry’s second-largest prestige brand.
During an interview, Brestle admitted feeling “very flattered and humbled” by his promotion.
He and Burns worked together as — in Brestle’s phrase — “compatriots and competitors,” while both of them jousted with Philip Shearer, the president of number three-ranked Lancome.
Shearer was recently elevated to the presidency of the newly created Perfume and Beauty Division at parent Cosmair Inc.
Brestle built Clinique to a volume plateau that equaled 83 percent of Lauder division sales, according to figures compiled by NPD BeautyTrends, a department store sales tracking organization.
Last year, Lauder had retail sales of $1.2 billion, compared with Clinique’s $1 billion. Four years ago, the ratio was 76 percent, according to industry statistics.
As reported, Brestle’s appointment was one of three made by Lauder. William P. Lauder, president of Origins Natural Resources Inc., succeeded Brestle as president of Clinique. Lauder, in turn, was replaced by Lynne Greene, who will become senior vice president and general manager of Origins. She was senior vice president of sales and education for the division.
All the changes will take effect Wednesday.
William Lauder, a grandson of the company founder, launched the Origins division in 1990 and helped build it to a retail volume of $75 million last year.
Of the three executives, Brestle has the longest — and most impressive — track record within Lauder. “Dan Brestle is one of our most accomplished, as well as experienced, executives,” said Leonard A. Lauder, chairman and chief executive officer. “During his tenure at Clinique, the brand consistently gained market share, not only overall, but in every category in which it operated. He also brings a unique ability of attracting and energizing highly creative people.”
Before joining Clinique in March 1992, Brestle was a force in the Prescriptives division, first as national sales manager in 1984, then as president in 1988.
Brestle joined Lauder in 1978, after five years of operational experience at Johnson & Johnson. Brestle recalls that he had picked a manufacturing job after coming out of six years in the Air Force because the transient life of a sales executive sounded too much like the service.
As a result, when Brestle got to Lauder, he ended up as “supervisor of the distribution center,” or loading dock, at the Aramis plant in Fairlawn, N.J., despite his schooling in marketing.
“I was Dan’s first call when he got out of the factory,” recalled William Dillard 2nd, ceo of Dillard Department Stores Inc.
“He is great with people,” Dillard continued, praising Brestle for his ability to “think out of the box.”
“Dan’s the best; he’s terrific.”
The retail chief recalled an instance when he and Brestle analyzed the business at Dillard’s and concluded that too much money was being spent on sales infrastructure. As a result, more funds were funneled into point of sale.
Eugene S. Kahn, recently named president and ceo of May Department Stores Co., was eloquent in his description. “Dan is an excellent businessman and a great leader,” he said. “Dan organized Clinique in a very positive fashion, and I hope he does the same with Lauder.
“He took a brand with a great following and was able to broaden it; the business is very well balanced. Not only in treatment, of course, but also in color and makeup. He is very innovative.”
Kahn cited Brestle’s work in adapting the assisted self-service selling concept to apply to a broader cross section of stores.
He was careful not to downplay the contribution of Brestle’s predecessor, saying that Burns “brought charm and charisma to Lauder and made it a different brand with fragrance. She will be a loss to the Lauder corporation,” he said, “and I wish her well.”
Brestle’s challenge going forward, Kahn said, “is to assess the brand in its totality going into the next millennium and to develop a strong attack.”
“Dan is a veteran with experience and drive,” he continued, “and he has an understanding of the department store business across the whole country. He is the person — if it is doable to reposition Lauder for the next millennium, he is the one to do it.”
Kahn concluded, “He has the drive, the determination and enthusiasm — the ‘get it done now’ spirit.”
Terry J. Lundgren, president of Federated Department Stores, agreed: “Dan is a very talented and experienced guy. He will be good for the Estee Lauder brand. He’s a long-term thinker and a no-nonsense leader.”
As for Brestle, he said his first priority is to meet with the Lauder organization at New York headquarters, and the second item on his agenda is to attend Lauder beauty school to learn what a beauty adviser learns and to speak their language. “If I can learn about fragrance in school,” he said with a laugh, “anyone can.”
Brestle admitted that he will have to get used to the complexity of the Lauder brand, since it is more multidimensional than Clinique.
Like William Lauder, Brestle said he still was not familiar with the details of his new division, but he had some preliminary impressions. One had to do with consumer age targeting. He said it is important to keep an eye on customers of all ages, particularly with the aging of the baby boomer generation. Even though marketers tend to focus on younger consumers, Brestle pointed out that women in their 50s and 60s are still mentally young and spend as much on cosmetics as they did in their 30s and 40s.
The Lauders had focused on younger customers mostly through Origins, the division in which William Lauder made his mark.
Federated’s Lundgren also praised William Lauder for the job he did with Origins and as the corporate coordinator for Lauder’s makeup artist brands, MAC and Bobbi Brown. “This is a key job for William,” Lundgren said of Clinique. “Now he is going into the trenches, which requires a different focus. This is an excellent career development job for William.”
William Lauder described Clinique as “a powerful, well-oiled machine,” much like a fast-moving train. He said he hopes not only to be a good engineer but a good conductor, who can “make sure everyone stays on the train.”
Without knowing the details of the business, Lauder said the one value he wants to instill is the value of teamwork, particularly since Clinique is already full of “incredibly smart, energetic people.”
Lauder, whose father is the chairman, is often mentioned in industry speculation as a possible successor to Leonard. Asked to comment on this, William said he hopes to be able to demonstrate that “I have the ability to manage a large organization.”
Leonard Lauder said of his son, “William is the only executive in the company who has built a brand from zero into a major force in the cosmetics industry.”
Noting his work with alternative store formats, Lauder continued, “This ability to not only conceptualize and implement, but also to think outside the box will stand him in good stead in Clinique.”
Both Lauder and Lundgren had praise for Lynne Greene. The former commended her ability to conceptualize a new brand and bring it to market. The latter said, “She’s focused, hard working and into the details.” Lundgren added, “She is a very good pick for this job.”
When asked how Lauder described her mission while giving her the job, Greene said it boiled down to one word: Growth.

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