How The Lauder Family Became The Fifth-Richest American Family, With A Combined Net Worth Of $40 Billion

We live in an era of truly incredible wealth and vast inequality between the richest billionaires and every day middle class people. The world’s 50 richest families have a net worth of $ 1.2 trillion. The Lauder family is the fifth wealthiest family in America, with a combined net worth of $ 40 billion. This is up from $ 24.3 billion two years ago. Estée Lauder started the family business in 1947 when she received the first major order for $ 800 skincare products from Saks Fifth Avenue. Today, the family business includes 31 different brands of make-up – including Clinique, MAC, La Mer and Bobby Brown – and generates $ 14.3 billion in revenue. Now, it has been said, makeup sales are down in 2020 due to a home and mask mandate related to the coronovirus epidemic. Who needs makeup when you don’t have to go out of the house and / or your face is half-covered at the grocery store? It will be interesting to see what the fate of the Lauder family looks like one year from now.

The fate of the Lauder family originated, perhaps not surprisingly, from a woman named Estée Lauder. Estée was actually born to Josephine Esther Mentor in 1908 in Queens, New York. His parents were immigrants from Hungary and Czechoslovakia. He was Jewish and owned a hardware store. The family lived above the shop. As a young girl, Lauder was ready to be 100% American and was embarrassed by her parents’ accent and old country ways. When World War I began, his uncle John came to live with his family. He was a chemist who created skincare products. Lauder starts mixing her face cream and is fascinated. She took her uncle’s products to school and did makeovers on her high school classmates.

how the lauder family became the fifth-richest american family, with a combined net worth of $40 billion

Erin Lauder and Jane Lauder (Photo by Jamie McCarthy / Getty Image for the Breast Cancer Research Foundation)

She dreamed of becoming a scientist and then a glamorous skincare expert. Before she could make that dream come true, she met and married Joseph Lotter, a successful textile seller. They moved to Manhattan and changed the spelling of their name to Lauder’s spelling of Oder. In 1933, Esty had her first child, a son named Leonard. During this time, she continued to improve her uncle’s facial cream. He gave a free performance in the metro, in the saloon, anywhere in the hotel. She went to her friends’ house to do makeovers. He did everything he could to get the word out. All of this made Esty realize that social contacts were essential in the beauty business.

He decided to retell his life story. Instead of being the offspring of the Jewish immigrants to Queens, she told the people that she was of an eminent descent. Sadly, his career was focused on his marriage and he and Joseph divorced in 1939. She moved to Miami after her divorce and sold her face creams to wealthy women who were on vacation. During this time, he had many affairs with wealthy and connected men to help him grow his business. After a few years, she realizes that she is doing this and she is not missing her ex-husband. His son Leonard accompanied Kanthamala and brought Esty and Joseph back. They remarried in 1942, with the agreement that they would work together to make their cosmetics company a success.

Estée and Joseph opened their first retail store in New York City in 1944. In December of the same year, their second son, Ronald Lauder, was born. Estée Lauder Inc. was officially formed in 1946. He sold his products from his store during the day. At night she made cream and oil for her products. She decided to sell her products exclusively at upscale department stores. He focused on Saks Fifth Avenue. Sax placed a large order and it sold out in two days. Esti was convinced that she had what it took to compete with the cosmetics giants of the day – Revlon, Elisabeth Arden and Helena Rubenstein.

In the early 1950s, Estée Lauder Line Neiman Marcus, Marshall Field, I. Magnin and Bonwitt could be found in Taylor. His company was still smaller than the leaders in the cosmetics business. Asti wanted to change it, but no advertising agency would take over their business. Therefore, the Louders put their entire $ 50,000 advertising budget in the sample size of their products, given through purchases, donation giveaways, and gifts with direct mail. This brought thousands of new customers.

In 1953, Estée introduced her first fragrance. It is called Youth Day, a bath oil that also doubled as a perfume. At $ 8.50, it was an affordable luxury for most women. Sales closed and within a few years, Youth Day made up 80% of Estée Lauder’s sales and took over small startups and turned it into a multi-million dollar business.

Estée continued to expand its product line in the 1960s. They also added a fashion-oriented, allergy-tested clinical line. He expanded his products to Europe with ‘Garry’s Lafayette in Paris and Harrod’s in London. By the mid-1970s, Lauder’s products were sold in more than 70 countries around the world.

Estée’s older son Leonard Lauder was president of Estée Lauder from 1972 to 1995, CEO from 1982 to 1999 and president from 2009. Under his leadership, the family business was transformed into a multinational public corporation from a private business built on his mother’s charismatic personality. – Something that was her dream from the beginning of Estée Lauder’s career. He had to sell his mother on the idea of ​​a multi-brand company. When she acquired Clinique in the late 60s, she wanted her to be called Estee Lauder’s Clinique. Leonard emphasized this notion and stated that a multi-brand company would have been impossible if it had a name on everything.

Estee Lauder acquired Prescriptives in 1979 and Origins in 1990, and from there the company went into a buying spree after purchasing MAC, La Mer and Bobbi Brown before going public in 1995. Lauders like to go after brands that are either killing them. A category or luxury market has introduced a new strategy. Rather they would buy a small $ 1 million company and make a $ 100 million business and develop it into a $ 200 million business instead of building it into a $ 100 million business. Estée Lauder became the third largest cosmetics company in the US in 1999, with a string of acquisitions in the 1990s. Estée Lauder products made up about 50% of all retail beauty products sold in American companies that fall under the Estée Lauder banner. , Including, but not limited to, Becca, Bobby Brown, Clinic, Glasgow, La Mer, Mac, Origins, Prescriptive, Smashbox, Two Faced, and Tom Ford Beauty.

Today, Erin Lauder, the granddaughter of 50-year-old Estée Lauder, is the image and style director of Estée Lauder, the cosmetics empire founded by her grandmother. She is in line to achieve the family fortune with her 47-year-old sister Jane, who is the global brand director for the clinic.

Estée Lauder built her global cosmetics empire on the motto, “There are no domestic women, only careless women.” She set out to convince those “careless women” that she could be beautiful with a little help of her products. She was successful, and with her oversized ambition and laser-like focus, took on – and won – the established cosmetics industry giants. She dreamed of being 100% American and was from a wealthy background as a child of migrants. What he did ensure that his heirs had the life and background he always dreamed of.

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