07.05.07
4. Estée Lauder
New York, NY
212.572.4200
www.esteelauder.com
Sales: $6.4 billion
Sales:
$6.4 billion. Net income: $244 million for the year ended June 30, 2006.Key Personnel:
Leonard A. Lauder, chairman; Ronald S. Lauder, chairman, Clinique Laboratories, LLC; William P. Lauder, president and chief executive officer; Daniel J. Brestle, chief operating officer; Thia Breen, president, Estée Lauder Americas and global business development; Patrick Bousquet-Chavanne, group president; John Demsey, group president; Cedric Prouvé, group president; Philip Shearer, group president; Peter Lichtenthal, president, Bumble and Bumble; Malcolm Bond, executive vice president, global operations; Roger Caracappa, executive vice president, global packaging, quality assurance, store development, design and merchandising; Amy DiGeso, executive vice president; global human resources; Harvey Gedeon, executive vice president, global research and development; Richard W. Kunes, executive vice president, chief financial officer; Evelyn H. Lauder, senior corporate vice president; Sara E. Moss, executive vice president, general counsel and secretary; Sally Susman, executive vice president, global communications.
Major Products:
Cosmetics, fragrances and toiletries marketed under such brand names as Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series for Men, Origins, Tommy Hilfiger, M.A.C., Kiton, La Mer, Bobbi Brown, Donna Karan, Aveda.New Products:
Estée Lauder—Advanced Night Repair Concentrate Recovery Boosting Treatment; Pleasures by Gwyneth Paltrow Collection; Beautiful Love; Projectionist High Definition Volume Mascara; Resilience Lift Extreme Ultra Firming Makeup SPF 15; Private Collection Tuberose Gardenia Perfume Spray, Eau De Parfum Spray, Solid Perfume Compact, Scented Body Crème, Brush-On Powder Compact, Mirror Compact; Body Performance Golden Naturally Radiant Moisturizer; Pure Color Gloss; Sun Performance Multi-Protection Sun Towelettes for Body SPF 15.Aramis—Aramis Crested bottle, limited edition and Aramis “a” Series bottle, limited edition.
Clinique—Full Potential Lips Plump and Shine, Take The Day Off Cleansing Milk, High-Definition Lashes Mascara, Happy in Bloom, Full Potential Lips Plump and Shine, Fresh Bloom Allover Colour, Continuous Rescue Antioxidant Moisturizer, Up-Lighting Liquid Illuminator.
Prescriptives—Anywear Multi-Finish Powder Foundation SPF 12, Lash Envy, Super Line Preventor Xtreme Flawless Skin Total Protection Makeup,Virtually Fresh Skin Refining Makeup SPF 15, Vibrant-C Skin Brightening Lotion & Cream Moisturizer, Vibrant-C Skin Brightening Eye Cream, Sunsheen Custom Color Tinted Self Tanner SPF 15, Colorscope Shimmer Sheer Loose Eye Color.
Lab Series Skin Care for Men—Instant Moisture Mask, Smooth Shave Oil and Triple Benefit Post-Shave Remedy, Oil Control Face Wash, Oil Control Daily Hydrator, Oil Control Towelettes, Anti-Acne Gel, Nutriplexx Hair and Scalp Protector.
Origins—Shedonism Exotic Floral Essence, Youthtopia Skin Firming Cream with Rhodiola and Youthtopia Skin Firming Lotion with Rhodiola, Plantidote Mega-Mushroom Eye Serum, Plantidote Mega-Mushroom Eye Makeup Remover Pads with Therapeutic Benefits, A Perfect World Nighttime Antioxidant Mask and Lip Guardian, Modern Fusion, Matcha Tea Body Scrub, Conditioning Lip Balm With Turmeric, Weil Bee-Ings Organic Health Support Honey.
MAC—Beauty Icon Collection with Raquel Welch, Nocturnelle (Holiday Collection), MAC Couture (Holiday Collection), Formal Black (Holiday Collection), Jewelescent (Holiday Collection), Brow Beat (Holiday Collection), Re-launch of MAC Skincare Collection (Holiday Collection), Mineralized Skinfinish (Post Holiday Collection), Mineralized Satinfinish (Post Holiday Collection), Danse (Post Holiday Collection), Studio Finish Concealor (Post Holiday Collection), Chrome & Crème (Post Holiday Collection), Barbie Loves MAC Collection, Paulina Rubio lipstick, Strange Hybrid (Summer Collection), Moonbathe (Summer Collection), Tendertones (Summer Collection), Sunstrip (Summer Collection), C-Shock (Summer Collection), Amuse (Fall Collection), Avant-gold (Fall Collection), Lip Varnish (Fall Collection), Outloud (Fall Collection, Patternmaker (Fall Collection), Plushglass (Fall Collection), Rockocco (Fall Collection), Studio Mist (Fall Collection), Untamed (Fall Collection), Technacolour (Fall Collection), Technacolour (Fall Collection).
La Mer—The Body Crème, The Cleansing Fluid, The Treatment Fluid Foundation, The Treatment Crème Foundation, The Powder, The Radiant Facial.
Bobbi Brown—Chocolate Eye Palette, Diamond Dust, Sparkles And Rubies Collection, Shimmer Brick and Lip Kit, Shimmering Gloss Palette, Best Sellers Lip Palette, Mini-Gift Sets, Bath Eau de Toilette, Bobbi Brown Living Beauty.
Tommy Hilfiger—Tommy 10, Tommy Girl 10, Tommy Limited Edition Summer Fragrance Set, Tommy Girl Limited Edition Summer Fragrance Set.
Kiton—Kiton Black.
Donna Karan—Gold fragrance; DKNY Be Delicious eau de parfum, body gloss spray, lip shine trio.
Aveda—Be Curly shampoo, conditioner and curl control.
Jo Malone—Blue Agava & Cacao Cologne, Vitamin E Nourishing Hand Treatment, Scent Surround Sprays in Linonel Vento and Acqua di Limone.
Michael Kors—Leg Shine Gold, Island Michael Kors Hawaii, Vey Michael Kors eau de parfum.
Darphin—Arovita C Energic Firming Cream, Line Response Cream, Line Response Firming Serum, Line Response Fluid Tangerine Aromatic Care.
American Beauty—Super Plush 10-Hour Lipcolor, Wonderful Indulgence Perfume Spray, Wonderful Indulgence Body Cream, All Is Forgiven, Waterproof Mascara, Mineral Powders.
Good Skin—All Bright Moisture Cream, All Bright Spot Treatment, All Bright Moisturizing Sunscreen SPF 30, All Bright Hand Cream SPF 15, Cheer Up All Over Healthy, Soft Reflection Illuminating Loose Powder, Natural Shine Lipstick, Creamcolor Lipstick SPF 15, Megabalm Tinted Lip Gloss, Naturally Cheeky Powder Blush, Fresh & Cheeky Cream Blush, Smoothcolor Eyeshadow Duos, Lash Lengthening Mascara & Conditioner, Totally Natural Loose Powder, Tri-Aktiline: Instant Deep Wrinkle Filler, Smooth-365.
Flirt!—Serena Williams 1st Guest Creator Collection, I’m Whipped Eyeshadow Mousse and Cheek Mousse, Serena Williams 2nd Guest Creator Collection, Flirtatious! Fragrance and Lip Plumper, Far Out Mascara, Flirtini Swirled Lipshine and Vanessa Minnillo Guest Creator Collection.
Grassroots—Happily Ever After Scent, Whipped Body Souffle, Foaming and Polishing Body Cleanser, World Of Your Own Scent, World Of Your Own Bubble Bath.
Sean John—Unforgivable.
Missoni—Missoni Bagno Body Butter, Shower Gel, Body Lotion, Pillar Candle, Eau De Toilette, Acqua.
Daisy Fuentes—Dianoche Fragrance, Body Shimmer All-Over Lotion, Firming Body Cream; So Luxurious fragrance.
Tom Ford—Black Orchid Eau de Parfum and Perfume, Private Blend Eau de Parfum and Decanter.
Coach—Perfume spray and solid, purse spray.
Comments:
Sales rose 3% in fiscal 2006, but net income tumbled. It was a relatively quiet year for Estée Lauder—no major acquisitions and only the divesture of Stila.In 2006 sales of makeup, skin care and hair care product categories were up, but fragrance sales fell. All regions reported a rise in sales; excluding the impact of exchange, net sales increased 4%. By product category, skin care sales increased 2% to $2.4 billion on the strength of new products such as Resilience Lift Extreme Ultra Firming Cremes and Re-Nutriv Ultimate Lifting Serum by Estée Lauder, and Turnaround Concentrate Visible Skin Renewer and Turnaround 15-Minute Facial by Clinique. On the downside, BeautyBank sales declined.
Makeup sales increased 6% to $2.5 billion due to the success of Lauder’s makeup artist brands. Fragrance sales fell 4%. Sales of Estée Lauder Beyond Paradise along with fragrances from Clinique and Tommy Hilfiger fell $106 million. Still, Estée Lauder owned five of the top 10 best-selling women’s fragrances in the U.S.
By region, net sales in the Americas increased 3% to more than $3.4 billion. Gains were reported in the U.S. due to the popularity of Lauder’s makeup artist and hair care brands, internet distribution and the introduction of the Unforgivable fragrance by Sean John. Sales in Canada, Latin America and Mexico increased $48 million.
In Europe, the Middle East & Africa, net sales increased 2% to $2.1 billion, thanks to a $64 million gain from travel retail and distributor businesses, and growth in Russia and the UK. Sales declined in Spain and Italy.
Despite the threat of terrorism, travel retail is soaring around the world. Last year, travel retail accounted for 7% of Estee Lauder’s net sales and 20% of operating income.
Net sales in Asia/Pacific increased 6% to nearly $870 million. Growth in China, Korea and Hong Kong was partially offset by decreases in Japan and Australia.
During the year, several brands entered new markets, including Clinique (Vietnam), La Mer (Chile and France), Aveda (Spain), MAC (Poland, Prague, Belgium and Estonia) and Jo Malone (Italy, Turkey and this month, Russia).
Keep Going and Growing
To keep the growth going, the company has identified five strategic imperatives:
• Optimizing brand portfolio;
• Strengthening product categories;
• Strengthening and expanding geographic presence;
• Diversifying distribution; and
• Achieving operational and cost excellence.
In a move to optimize its portfolio and concentrate on its successful makeup artist brands, MAC and Bobbi Brown, the company divested Stila. The MAC brand is its fastest-growing brand outside North America. The company said Bobbi Brown resonates strongly with Asian consumers, and is fast becoming a global powerhouse among women who connect with the brand’s beauty philosophy-to look like who you are...only prettier.
Estée Lauder’s business is focused on four major categories: skin care, makeup, fragrance and hair care. Annual sales in both skin care and makeup have passed the $2 billion mark, as the consumer trend around the world is on attaining affordable luxuries, according to the company.
Skin care was the most profitable category in fiscal 2006 and Estée Lauder expanded its leadership in anti-aging, protection and daily face care. Makeup was the fastest-growing category for the prestige cosmetics business in fiscal 2006. The company boasts that it has three of the top five face products in U.S. department stores, and its brands are concentrating on building equity in the other key categories that draw traffic to counters, such as mascaras, eyeshadows and color collections.
To succeed at the overcrowded fragrance counter , Estée Lauder is focusing on a select number of mega-launches while adding “freshness and modernity to our existing fragrances with rejuvenating new products.” (For more on fragrance, read our coverage of the World Perfumery Congress coverage on p. 60 in the July issue.)
In hair care, Aveda and Bumble and Bumble continue to work with salon owners through education programs in salon management, styling and product development to help enhance the quality of the consumer salon experience.
A Range of Honors
In other company news, Estée Lauder was recognized as one of Fortune’s Most Admired Companies. It opened a state-of-the-art Innovation Institute for research and development in Kobe, Japan and expanded research and development in Tokyo. Lauder received its second perfect score in two years from Human Rights Campaign’s Corporate Equality Index for GLBT employees and was named one of HRC’s best places to work for GLBT equality.
For the nine months ended March 31, 2007, sales rose 9% to nearly $5.3 billion. By region, sales in the Americas rose 2.7% to $2.7 billion. Sales in Europe, the Middle East & Africa were up 16.1% to $1.8 billion and sales in Asia/Pacific rose nearly 14% to more than $741 million.
By product category, skin care sales rose 8.9% to $1.9 billion, makeup sales increased 8.5% to more than $2 billion, fragrance sales rose 5% to $994 million, hair care sales were up nearly 19% to $273 million and other product sales rose 33% to $28 million.
To get fragrance sales growing again, Aramis and Designer Fragrances inked a deal with Ford Motor Company to roll out Mustang, a new men’s fragrance. Closer to home, Estée Lauder is capitalizing on its rich heritage with the launch of Private Collection Tuberose Gardenia created by and featuring Aerin Lauder. Finally, BeautyBank created Coach fragrance in partnership with Coach.
Within skin care, Clinique partnered with musicians Rihanna and Julie Roberts and teamed up with Weill Cornell Medical College to open the Clinique Skin Wellness Center at Weill Cornell in New York City.