The company's Estée and Bobbi are counted among some of the closest friends to women worldwide. Estée Lauder sells cosmetics, fragrances, and skin and hair care products, with brands including upscale Estée Lauder and Clinique, as well as professional Bobbi Brown and luxurious Tom Ford beauty and fragrance lines. Its products are sold in upscale department stores, specialty retailers, online, and 690 company-operated single-brand stores and 130 multi-brand stores. Estée Lauder operates a chain of freestanding retail stores (primarily for its M.A.C, Origins, and Aveda brands). Fabrizio Freda, a veteran of Procter & Gamble, heads Estée Lauder as CEO.
Estée Lauder products are sold in more than 150 countries and territories. The Americas (primarily the US) are the company's largest market, representing more than 40% of sales. Europe, the Middle East & Africa accounts for more than a third.
Sales and Marketing
Advertising and promotions are key in the ultra competitive personal care products market. The company's marketing creed is to provide "high-touch" service to build customer loyalty. Estée Lauder advertises on TV, in magazines and newspapers, on digital and social media sites, and on billboards and via direct mail. Promotional activities include in-store displays. The company's largest customer is department store operator Macy's, representing about 11% of fiscal 2013 (ended June) sales.
Estée Lauder's sales topped $10 billion in fiscal 2013 (ended June), a 5% increase over the prior year. Net income rose 19% over the same period. The company reported growth across all of its product categories and geographies. The Americas, the company's largest market, posted a 5% gain in sales, as did the Asia-Pacific region.
To underscore its panache for high-touch service and its growing portfolio of prestige brands, Estée Lauder in late 2014 inked a deal to acquire Le Labo, which specializes in distinctively French high-end fragrance and sensory items that have earned a loyal consumer following for its exclusivity and personalized service. With offices in London and New York, Le Labo boasts minimalistically-designed freestanding stores in New York, London, Paris, Los Angeles, San Francisco, Tokyo, and Hong Kong.
Despite its ranking and market share, Estée Lauder and the Lauder family have been working to breathe new life into its flagship brand as competition has heated up. While Coty, Elizabeth Arden, and L'Oréal are enlisting the help of celebrities to elevate and give credibility to their brands, Estée Lauder sewed up its brand rejuvenation with a boost from fashion. The company is banking on a multi-year partnership with former Gucci Group creative director and fashion talent Tom Ford to continue its successful Tom Ford-inspired Estée Lauder line. The company has expanded its customer base to include younger shoppers through its M.A.C and Clinique cosmetics lines. Its 2010 purchase of Los Angeles-based Smashbox Beauty Cosmetics supports this strategy. Estée Lauder has also expanded its distribution channels to include mass merchandisers and salons. The company has been gradually shifting business from department stores to its own stores and other outlets. Its online Origins presence has expanded, too. Clinique, M.A.C, Origins, and Bobbi Brown sell products online.
Estée Lauder kicked off a turnaround plan in 2009 to save as much as $550 million by 2013, but the plan has morphed into a long-term strategy to guide the company through 2015. The plan aims to boost non-US sales to more than 60% of revenue, with the Asia-Pacific region leading the way. As part of its strategy, Estée Lauder is shifting its category mix to more high-margin products that have global growth potential. To this end, the company is focused on skin care products -- its most profitable category. Also, Estée Lauder has been penning licensing agreements to boost its brand and reach. Estée Lauder and Sean John, the private company formed by Sean "Diddy" Combs, co-developed a line of fragrances under the Sean John name. In recent years Estée Lauder has expanded its European fragrance offerings through a deal with the Milan-based Missoni fashion business. The two companies market scents and related products through Lauder's Aramis and Designer Fragrances division.