Leonard Lauder, who grew a cosmetics store that started in his mother's kitchen into the world's third-largest beauty empire, passed away at the age of 92 on the 15th.
Estée Lauder Companies said in a statement that "Leonard Lauder, an insightful leader and a symbol of the industry, peacefully passed away at his home in New York."
In the wake of his death, major foreign media such as The New York Times (NYT) and Bloomberg reported that "the figure who modernized the cosmetics industry and made it a cultural phenomenon has faded into history."
Born in 1933, Leonard Lauder began his business career in 1946 at a small cosmetics company founded by his mother, Estée Lauder, and his father, Joseph Lauder.
At that time, Estée Lauder was a small neighborhood store with only four skincare products. Leonard officially joined the company in 1958.
He served as chief executive officer (CEO) from 1972 to 1999 for 27 years. During this time, the company, which had an annual revenue of $800,000 (about 110 million won), grew into a giant corporation with annual revenue exceeding $4 billion by the time he stepped down. As of last year, Estée Lauder's annual revenue reached $17.7 billion (about 24.5 trillion won).
Leonard Lauder is always associated with the term "Lipstick Index." This economic theory, which he devised, was based on the phenomenon he observed where lipstick sales surged by 11% in the aftermath of the September 11 attacks in 2001, when the U.S. economy fell into a deep recession.
He argued that when the economy gets tough, women consumers tend to fulfill their desire to spend and uplift their spirits with relatively inexpensive cosmetics like lipstick, instead of buying expensive clothes, bags, or jewelry. He supported his theory by citing statistics showing that cosmetics sales increased by 25% during the Great Depression.
CNN evaluated that "the Lipstick Index is one of the most famous economic terms explaining consumer patterns during recessions today."
Leonard incorporated the 'consumer experience' philosophy inherited from his mother into Estée Lauder. Founder Estée Lauder personally visited beauty salons in the 1940s to promote products by applying cream to consumers' hands.
He claimed, "Trust in the telegraph, telephone, and tell-a-woman," emphasizing the power of word of mouth and experience.
Leonard is recognized as the first person to actively introduce a sample strategy in the cosmetics industry. He applied this promotional method across department stores nationwide, establishing it as an industry standard.
Bloomberg stated, "Leonard was the first to introduce a program granting free samples to consumers who wanted 'pre-purchase experiences' in the cosmetics industry," noting that "this strategy became a powerful weapon for enhancing brand loyalty without massive advertising costs."
The decisive factor that transformed Estée Lauder into a global corporation was its aggressive brand expansion strategy. He was not satisfied with just the 'Estée Lauder' single brand. In the 1960s, he began diversifying the business by introducing the men's cosmetics brand "Aramis" and the low-irritation brand "Clinique," developed with dermatologist consultations.
Beginning in the 1990s, Estée Lauder shone in the mergers and acquisitions (M&A) sector. During this period, Estée Lauder acquired core brands of the Estée Lauder Group, such as the Canadian color cosmetics specialist brand "MAC" (1994), the makeup artist brand "Bobbi Brown" (1995), the so-called miracle cream "La Mer" (1995), the eco-friendly brand "Aveda" (1997), and the British fragrance brand "Jo Malone" (1999).
As a result, Estée Lauder stood as the world's third-largest cosmetics company, following L'Oréal and Unilever. It currently develops over 25 brands in more than 150 countries worldwide, encompassing all areas related to skin, from skincare to makeup, fragrances, and haircare.
Estée Lauder was listed on the New York Stock Exchange at $26 per share in 1995, and its current market capitalization is about $24.3 billion (about 33.6 trillion won). According to the Bloomberg Billionaires Index, Leonard's net worth amounts to $15.6 billion (about 21.6 trillion won).
Experts assessed that Estée Lauder grew alongside the enhancement of women's social status in the 20th century. It contributed to the spread of makeup as a self-care culture focused on self-love and personal grooming, rather than merely decoration.
The founding philosophy, "Every woman can be beautiful," was received as a message that instilled confidence in women who became active in society since the 1940s.
Estée Lauder is currently managed by his son, William Lauder, who serves as the chairman of the board, continuing the family management into its third generation.
In the art world, Leonard Lauder is remembered as a passionate art collector and philanthropist. In 2013, he astonished the world by donating a $1 billion (about 1.36 trillion won) Cubist art collection, including works by Pablo Picasso and Georges Braque, to the New York Metropolitan Museum of Art.
In a 2020 interview with CBS, he responded to the question, "How do you want people to remember you?"
"I want to be remembered as someone who listened, was kind, and helped others."