Interview ; Leonard Lauder ; Jonathan Birchall talks to the chairman emeritus of Estee Lauder
There is no sign that Leonard Lauder, the 77-year old chairman emeritus of Estee Lauder, is slowing down, as he brings an end to this interview at his office overlooking New York’s Central Park.
"There’s a meeting I really must make," he says. "Don’t let them start without me," he calls to his secretary. It was his first day back in the office after a trip to Paris, but there were no signs of jet-lag.
Mr Lauder stood down as executive chairman in favour of his son, William, last year, in a transition that also saw Fabrizio Freda take over from William as chief executive. But the elder Lauder is clearly still an active force in the company.
Mr Lauder senior stresses that he is "the company worrier". "If you need someone to worry about something, call me, and I’ll worry about it,discount tiffany," he jokes. Currently, he is worrying about the oil spill in the Gulf of Mexico,tiffany necklaces, and the possibility that it could weaken President Obama, and create political upheaval.
"And whenever there is political upheaval or uncertainty, it doesn’t bode well for anyone,tiffany bangles," he says.
Meanwhile, in his own business, the economic upheaval of the past two years means "the word luxury has fallen on hard times". With the economic downturn "the word luxury has a different sound to it than it did two or three years ago. It seems a little bit less acceptable," he says.
But Mr Lauder is not a man who lets his worries get in the way of his enthusiasm for the business founded by his mother, Estee.
The company, as he proudly says, transformed the cosmetics business in the 1960s by introducing the concept of aspirational luxury to the US cosmetics business.
"I think the biggest thing that has happened in the past 52 years is the rise of the luxury business and the rise of the beaute brands.
"Prior to our arrival, the business was dominated by companies that had broad distribution, but it did not focus on the exclusive customer. We are the ones who invented that business."
Mr Lauder himself started the internationalisation of the Estee Lauder brand, opening the company’s first account with Harrod’s in London in 1960.
As president, and then chief executive from 1982 to 1999, he oversaw its global expansion. And it is the global business that he says gives him and others at the company "the most fun", as they deal with the shifting patterns of global demand for aspirational products.
"The big question is, ‘who are the aspirers?’ In the 1960s, it was the upwardly mobile American middle class. The aspirers of the 1970s were the Japanese; and in the 1990s it was Middle Easterners. And now the aspirers of the 2000s are the Chinese. The concept of aspiration remains, but the people change."
"The largest threat I see is not my competitors, but the possible shift in buying patterns.
"Our channels are constantly shifting, emerging and decreasing. We now have to match our brands to the demographics, to the country, to the pyschographics, and to the economies."
Under its chief executive Mr Freda, a former senior executive at Procter & Gamble, the company is developing a network of innovation centres around the world. These aim to take local expertise in beauty products global. Mr Lauder argues that the company is also an established leader in the need to tailor its products and offerings not just to different countries around the world, but to different markets.
"To us, local is not just by country. We have a way of dealing quite well with the LA customer in south Florida,tiffany rings, and the same as we deal with the the Hispanic customer in San Diego, the Vietnamese customer, the Korean customer. That happens to be our particular skill. We segment the segments."
While he admits that he does not have a Facebook account, and has never sent a tweet, Mr Lauder is a keen advocate of e-commerce, seeing it as another of those channels, like China, that might not have been on the radar screen 10 years ago.
"How can you avoid the inevitable," he asks of the luxury industry’s lukewarm initial response to the internet. "How can you avoid the fact that e-commerce and the internet are ubiquitous?
"In earlier days, if you had a luxury product, the only way to distribute it was through a speciality store or a department store in a small town. Today, the hunger for luxury products is world-wide. And all you need is a customer in Lyons, one in Bordeaux and one in Montpellier and all of a sudden, there’s an e-commerce opportunity."
Meanwhile, in the US, he finds it hard to assess what exactly is going on in the luxury business after the recession, even as the economy starts "tentatively and slowly taking a few short baby steps in the right direction."
Assessing the US luxury market is, he says "a very murky job right now. And I don’t think anyone has really figured it out".
Globally, too, he sees a more fragmented market: "In the past we were able to use the analogy that a rising tide lifts all boats. There is no rising tide now."
But amid uncertainties, he argues that the increasingly assertive Asian economies are where the growth is coming from, either at home, or in Paris and Italy, as an increasingly prosperous middle class travels abroad.
"I think the people who are buying the luxury goods produced in France and Italy, they are probably not all Europeans."
"That’s what makes this a most fascinating business. And I have told the people that I work with, and I don’t think that they believe me, that I would pay to have this job."
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[...] Aspiring to beauty at home and abroad [...]
July 12, 20107:02 pm