Estee Lauder 2002 Annual Report Download - page 6

Great companies are built neither on wide swings of policy and strategy nor on a stodgy attachment to tradition.
We honor our rich company heritage because it has worked, in tough economic times and good ones.
Consistency does not preclude the ability to seize opportunities, limit losses or initiate trends. The Estée Lauder
Companies’ tradition does require, however, that we pursue growth in a manner consistent with — in the words
of our motto — Bringing the Best to Everyone We Touch. Responsibly. Ethically. Persistently. Beautifully.
Consider the themes of our last six annual reports, and you will see how well positioned we are for current and
future challenges on all the critical fronts:
• We have diversified our product categories — for men and women: We are leaders in makeup, skin care and
fragrance. We took a dramatic step in hair care in 1997 when we acquired Aveda and complemented it with our
acquisition in 2000 of a majority interest in Bumble and bumble, and new hair care offerings from our major brands.
• We have anticipated demographic changes: Our products are needed, coveted, purchased and used differently
by teenagers, Generations X and Y, boomers, seniors and everyone in between. Fred Langhammer, our CEO,
has characterized our brands as “rule breakers” and “rule makers”. We appeal to a wider range of consumers with
such “rule breaker” and niche brands as Origins, jane,Stila,Bobbi Brown,M
.A.C, La Mer, Donna Karan and
Tommy Hilfiger. Our “rule maker” brands — Estée Lauder, Clinique, Prescriptives and Aramis — have broken some
rules of their own while retaining their core consumers over the years. One of our original product offerings in
the 1950s, Estoderme, promised to keep youngish skin looking young. Now, our laboratories consistently
develop market-leading formulas, such as Estée Lauder Advanced Night Repair Eye Recovery Complex, Clinique
Total Turnaround Visible Skin Renewer, Origins A Perfect World White Tea Skin Guardian and Crème de la Mer,
that help protect and repair aging skin.
• We have diversified our distribution: The Estée Lauder Companies can boast that it has one of the broadest
portfolio of distribution options in the beauty and personal care industry, with a sophisticated logistics system
that moves some 23,000 different product SKUs. Depending on the brand, its customer base and our market
strategy, we can reach different consumers with the appropriate product through department stores, specialty
stores, beauty salons, perfumeries, mass outlets or freestanding stores, as well as over the Internet or by direct mail.
GREAT COMPANIES ARE BUILT NEITHER ON WIDE
SWINGS OF POLICY AND STRATEGY NOR ON A STODGY
ATTACHMENT TO TRADITION. WE HONOR OUR RICH
COMPANY HERITAGE BECAUSE IT HAS WORKED, IN TOUGH
ECONOMIC TIMES AND GOOD ONES.
• We have diversified our brands: Our brands are conceived for diverse groups of consumers, whether they seek
high glamour, natural enhancement, romantic illusion, luxurious pampering, healthy protection, outrageous fun
or pure maintenance. Our 16 brands are in varying stages of development, providing balance for us in the
marketplace. We will continue to look to acquire brands with unique positioning that complement our portfolio.
Typically, these are rapidly growing, high-margin brands with passionate, entrepreneurial management teams
and potential for long-term global growth.
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