Cosmetics Queen Put New Face on Beauty Industry

Estee Lauder, founder of the international beauty empire that bears her name and queen of America’s prestige cosmetics industry who pioneered the now ubiquitous “gift with purchase,” has died. Her family said she was 97.

The doyenne of makeup died Saturday at her home on the Upper East Side of Manhattan of cardiopulmonary arrest, said her son, Leonard A. Lauder.

A self-propelled dynamo, Lauder raised cosmetics merchandising to an art form through incessant work, a passion for quality and creative sales techniques. From the start of her career, as a teenager in the 1920s, she ignored conventional wisdom and forged new paths, unabashedly marketing cosmetics as “jars of hope.” By 1998, she was the only woman listed among Time magazine’s 20 most influential geniuses of business of the 20th century.

Lauder, who was very protective of her birth date and other personal information, began life as Josephine Esther Mentzer -- one of six children of Jewish immigrants from Hungary who lived above the family’s hardware store in the working-class neighborhood of Corona, Queens. She entered the beauty business armed only with a flawless complexion, an uncle’s face cream formula and unlimited ambition to succeed.

Fifty years later, when she had begun delegating authority to her sons, Leonard and Ronald, she had become one of the world’s richest women, according to Forbes magazine. (By the late 1980s, her personal assets were listed in excess of $233 million.)

And one of the most respected, as well, ranking tops in numerous polls along with Mother Teresa, Jacqueline Kennedy Onassis and Nancy Reagan. President Nixon hoped to appoint her ambassador to Luxembourg, but she graciously declined.

Her company’s labels -- Estee Lauder, Clinique, Origins, Prescriptives and Aramis -- became bestsellers around the globe. In 2003, net sales of all products sold in 130 countries by the Estee Lauder companies (which went public in 1995) reached $5.12 billion.

Lauder, who stood 5 feet, 4 1/2 inches tall, wrote in her 1985 autobiography, “Estee: A Success Story,” (Random House) that she was interested in beauty even as a child and would comb her mother’s long hair and pat her face with creams for hours. As a teenager, she was fascinated by the work of an immigrant uncle -- a chemist who lived nearby and had some basic formulas for face creams. He taught her about ingredients and how to formulate products right in her own kitchen. Then she struck out on her own, apparently before she finished high school. (An unofficial biographer could find no record of her high school graduation.)

At first, Lauder sold her creams and lotions at small beauty salons in her own neighborhood. In those days, no one else was doing such a thing, and hair salons themselves were in their infancy. And Lauder didn’t just sell. She schmoozed as she massaged, patted, soothed and smoothed -- rippling her fingers gently over the skin of women marooned under huge metal hair dryers and desperate for distraction of any kind.

“Her restlessness would work for me,” Lauder wrote of those first customers. After the woman’s hair was dry, but before it was combed out, Lauder would whisk off the cream and quickly make up the woman’s face with her limited selection of home-brewed products, which included one turquoise eye shadow and one lipstick shade, called Duchess Crimson (after America’s fashion idol of the day, the Duchess of Windsor).

“I would send the woman off to get combed out. When she was finished, she would ask ‘What did you do? What did you use? How did you do it?’ ” In most cases, Lauder wrote, the woman would leave with at least one purchase in her purse -- and one free sample.

From the start, Lauder shunned traditional ways of promoting her products, partly because she had no money for ads, but also because she instinctively understood the dynamics of hands-on demonstrations and of free gifts of her wares. She’d snip off the top of a lipstick, scoop up a spoonful of face powder, place them in little waxed bags and press them into the client’s palm. Lauder rightly believed that these women would return to buy more of her products once they learned how good they were. “Rapture is feeling pretty,” she wrote. And rapture was, in essence, what she sold.

Lauder was a perfectionist, by all accounts. As she expanded by starting cosmetics counters at more nearby salons, she hired only those women who could meticulously obey the techniques she had invented and already branded as her own. When offered the opportunity to expand with a counter at a shop in Brooklyn, more than an hour’s travel away, Lauder declined. It was too far for her to properly oversee on a daily basis, she said.

In 1930, after a three-year courtship, she married Joseph Lauter, who was six years her senior and who had studied accounting in trade school on the Lower East Side of New York. On their marriage application, he listed his occupation as “silk” -- an apparent reference to his work in the garment industry. They changed their name to Lauder soon after and began working together.

(In her autobiography, Estee wrote that Joe’s father’s name was originally “Lauder,” but an immigration officer “heard the d as a t . . . Joe and I decided that we would return his name to the integrity of the original so that the family we hoped to create would honor his father’s proper heritage.”) Actually, the father’s name originally was Lithauer.

Estee did all the outside work, and Joe toiled behind the scenes on production and finance -- a pattern the couple were to maintain for the rest of their lives together.

Estee’s attention to quality was also lifelong. Not only did products have to be of the highest caliber possible, but so did containers. In 1944, for example, when most postwar lipsticks were packaged in plastic, Lauder presented hers in an elegant metal case.

When Lauder finally stopped selling in beauty salons and began to establish her presence in department stores, she came up with the natural successor to her informal free product giveaways: the “gift with purchase.” Her competitors called it “crazy” and sneered that she was “giving away her profits.” But Lauder’s sales figures soared, and the competitors soon started copying her. To this day, the gift with purchase is standard operating procedure in cosmetics and many other industries.

Lauder revolutionized the American fragrance industry in the late 1940s with her creation of Youth Dew, a sweet, sensual bath oil formulated so it could double as a perfume. In those years, most fine perfumes were expensive French imports, packed in jewel-like bottles, sealed with wax, ribbons and gold mesh wire. Middle-class women considered it extravagant and self-indulgent to buy such items for themselves. They waited to receive perfume as gifts, and then used the precious fluid only on special occasions.

Deciding to change all that, Lauder developed an inexpensive bath oil ($8.50), with a twist-off cap and a warm, heady scent that clung to the skin for hours. Women bought millions of bottles of the stuff and soon learned to enjoy wearing scent on an everyday basis. They became eager customers for the Youth Dew colognes and perfumes subsequently marketed by Lauder and others who copied her. The American fragrance industry benefited from Lauder’s coup.

For more than half a century, Estee Lauder kept most of her personal background information secret, hinting in press interviews at an aristocratic lineage and childhood idylls in Viennese palaces with crystal chandeliers. Critics sniped at her for what they considered foolish vanity. But others said it was probably a wise marketing decision for her to create the illusion that she was born into the elegant social set to which she aspired.

In 1985, when Lauder learned that author Lee Israel was finishing an unauthorized biography of her, she rushed to produce a book that would get to bookstores first and tell her story the way she wanted it told. “Estee: A Success Story” was unexpectedly candid in some respects, but maddeningly devoid of chronological detail.

Israel’s book revealed little to conflict with Lauder’s own saga, in which Estee conceded that she had been ashamed, as a child, of her parents’ old-country ways and heavily accented English. “I wanted to be 100% American,” she wrote.

The Lauders’ first son, Leonard, was born in 1933 and literally grew up surrounded by the cosmetics his parents “cooked” at home and the business decisions they discussed constantly. The business was, and remained for many decades, a truly mom and pop operation. Estee called most shots about products, sales techniques and packaging; Joseph offered the hard-nosed financial advice, wise counsel and emotional support that allowed them to propel the firm forward.

To enlarge her customer base and reach a more socially elevated clientele, Lauder started traveling to East Coast summer resorts, where she sold to wealthy vacationers who often invited her back for more of the same at their winter homes. Friendships and sales figures bloomed. “I felt flushed with excitement after each session; it was pure theatre for me,” Lauder recalled in her book.

As the Lauders’ prospects improved, their family life faltered. In 1939, Estee and Joseph were divorced. She moved with Leonard to Florida, where she reportedly had a liaison with a married fragrance industry executive who, it was later rumored, helped her develop the scent that eventually became Youth Dew. In her book, Lauder says the formula had been in her family for years.

Of that period away from New York, Lauder later wrote that she regretted her divorce and desperately missed her husband and home. She had been working so hard to build her business, she wrote, “that I lost touch with what was most important to me.” She characterized her relationship with Joe as “one of the greatest love stories of all time.”

In 1942, Estee and Joseph remarried and resettled in New York. Their second son, Ronald, was born in 1944 -- an event that didn’t stop the Lauder whirlwind. Estee Lauder, the corporation, was formed in 1946, at which point there were no employees and only four skin-care products and three makeup items. (At her death, products numbered some 2,000 and employees 21,500.)

The Lauders’ big break came when Estee managed to wheedle a small order from Saks Fifth Avenue, their first department store. She had determined that that was where her products belonged -- a place where society’s top drawer shopped and where women could guiltlessly purchase hundreds of dollars worth of makeup and simply say, “Charge it, please.”

Home cooking of products was no longer enough. The couple took over a vacant eatery on the Upper East Side and, Lauder later wrote, “on the restaurant’s gas burners we cooked our creams, mixed them, sterilized our pretty jars with boiling water, poured and filled and planned and packaged.... Every bit of work was done by hand -- four hands, Joe’s and mine.” Saks sold out of their products in two days.

Spurred by success, Lauder began crisscrossing the country -- a kind of store-to-store salesperson in couture clothes -- introducing herself and her products to the heads of all the nation’s fine department stores.

Stanley Marcus, former president of Neiman Marcus, recalled in 1999 how Lauder charmed him into offering her space in his flagship Texas store, even though “we already had Elizabeth Arden, Germaine Monteil and Charles of the Ritz. We didn’t need another line.” Lauder intercepted him at the store and begged him to give her products a chance.

Undecided, he asked how much counter space she needed. She said “anything will do.”

When could she give it a trial run? She said “right away.”

She had brought all her products with her in a huge suitcase. The next morning she was on duty, handing samples to women as they entered the store: “Try this. I’m Estee Lauder, and these are the most wonderful beauty products in the world.”

For the next few decades, Lauder was like a general commanding troops as she traveled the country inventing new ways to introduce women to her products and making sure her growing army of salespeople did the right Lauder thing in the right Lauder way. Legend has it that she “accidentally on purpose” dropped a bottle of Youth Dew on the floor in a fine Paris department store. The powerful lingering scent captured shoppers’ attention and drew them, like magnets, to her counter without a word being said.

Between travels, she and her family created new products, packaging and strategies.

Aramis became the first men’s treatment line in department stores. Clinique, launched in 1968, was the first upscale line of allergy-tested cosmetics. It lost $20 million before it caught on to become the bestseller it is today.

Lauder declined to sell her products in drugstores, even when her competitors were making huge profits by doing so. She preferred to remain elite, she said.

Her social clout grew along with her income. The couple’s name started popping up in newspaper coverage of major charity and social events. They purchased palatial homes in Palm Beach, the South of France, Long Island and New York. (She eventually became acceptable in the social circles she had only dreamed of when starting out. When Princess Diana came to dine at the White House shortly before her death, for example, she asked that three guests be invited: Robert Redford, Bruce Springsteen and Estee Lauder.)

In the 1960s, the Lauder Foundation was set up to fund three Central Park playgrounds and support other New York civic causes and charities. After her husband’s death in 1983, she established the Joseph H. Lauder Institute of Management and International Studies in his honor at the University of Pennsylvania.

Elder son Leonard, who made his post-college career with the family firm, established the firm’s first sales force and its first research and development laboratory. He became president in 1972 and is now chairman and chief executive officer. Ronald, who served as U.S. ambassador to Austria in the Reagan administration, is now chairman of the Museum of Modern Art in New York and director of several major Jewish organizations.

After Joseph’s death, Estee and her sons apparently agreed to keep the firm a family affair. Because the firm was privately owned, they were able to spend multiple millions perfecting products and recalling products with which they were not quite satisfied. Stockholders would never permit a publicly owned firm to indulge in such uneconomical pursuit of excellence. In her 1985 book, Estee wrote that the business would never go public while she was alive. That year, Leonard told Forbes magazine essentially the same thing.

But it went public in 1995, with a value estimated at $2 billion. The Lauder family retains control of most of the stock.

In addition to her sons, Lauder is survived by four grandchildren, including William Lauder, who will become chief executive of the Estee Lauder Cos. on July 1; and six great-grandchildren.