MEET THE LAUDERS: The Cosmetics Tycoons Who Just Gave Away A Billion Dollars In Art

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This past Wednesday, philanthropist and cosmetics tycoon Leonard Lauder donated a cubist art collection worth $1 billion to the Metropolitan Museum of Art.

That may seem extravagant, but Lauder can afford it — Forbes estimates he’s worth $8.1 billion, due mainly to the cosmetics empire founded by his mother, the late Estée Lauder.

Her shrewd sales tactics and corporate strategy have kept the Lauders on top for over seven decades. Estée Lauder pioneered giving out product samples to women, encouraged them to try her scents at the department store counters, and undercut her competitors with cheaper prices and better marketing.

Today, the Estée Lauder empire now owns 29 other big-name brands and reported sales of just over $9.7 billion to investors last year.

And how the Lauders spend all that money is almost as interesting as the rags-to-riches story of how the daughter of two Hungarian Jewish immigrants left behind a beauty dynasty.

Estée Lauder was the daughter of Hungarian Jewish immigrants.

According to the book Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell, Estée Lauder was born Josephine Esther Mentzer in 1908 in Queens.

Her father was Max Mentzer, a Hungarian Jewish man who immigrated to the United States in the 1890s.

Her mother Rose also left Hungary in 1898, but came to join her first husband with their five children. The historical record is fuzzy, but within seven years of arriving she had left her first husband and married Max Mentzer instead.

She got her start by selling cosmetics in a beauty salon.

Estée's uncle John Schotz was a chemist with his own cosmetics company, New Way Laboratories. She would sell his products for him.

The story goes Lauder was getting her hair done and was approached by the salon's owner about her 'perfect skin.' Lauder says in her autobiography that she came back to the store and gave the salon owner a makeover with her uncle's products.

The owner was so impressed that she let Estée sell the creams and cosmetics out of the salon.

By the time Estée married Joseph Lauder in 1930, her business in Manhattan beauty salons was on the rise.

So she stopped selling her uncle's products in 1935 and started her own company -- Estée Lauder, after her middle name.

The couple ran the business together out of a small office on 39 East 60th Street in Manhattan, and made all of the creams and cosmetics on gas burners in a former restaurant on 1 West 64th Street, according to Brand New.

They even attached the labels themselves.

She revolutionised the beauty world by becoming the first company to give out product samples.

After WWII, Estée wanted to reach a larger market, and moved her products to department stores such as Saks Fifth Avenue and Neiman Marcus.

She became an instant success thanks to her talent for sales -- she believed in making contact with every customer and providing free makeovers. She also started giving out product samples with every purchase, something no one else was doing at the time.

Business expanded to revenues of $500,000 annually, according to Brand New.

Estée developed a bath oil called Youth Dew in 1953, and began selling it for $5 a bottle (compared to other perfumes at the time which retailed from $40-$65, according to Brand New).

She would leave the bottles on the department store counter and encourage women to try out the scent. Sales soared as more customers discovered the Estée Lauder brand through the fragrance.

Youth Dew was also great for the company's bottom line since perfume has better gross margins (80%) than makeup and skin care products (70%).

Throughout all this, Estée and Jo Lauder had two sons together: Leonard and Ronald.

Leonard was born in 1933, and Ronald in 1944.

Both boys became a part of the company throughout their childhood. They would fill jars, deliver packages, type invoices and answer phones in the brand's early years.

Leonard is now worth a reported $8.1 billion, and his brother Ronald is worth $3.6 billion.

In 1958, Estée Lauder reached its first $1 million in sales.

Leonard was the first son to officially join the company in 1958 after completing business school.

That same year, the company made its first $1 million in sales, and moved into a new Manhattan office and production facility in Nassau County, Long Island. They still only had about 13 workers, according to Brand New.

Estée Lauder expanded its line to include allergy tested brand Clinique in 1968.

Ronald Lauder followed his brother and joined the company in the mid-1960s. He was instrumental in establishing the company's Clinique brand in 1968.

The idea was for Clinique to become an in-house competitor with Estée Lauder products. It was the world's first allergy tested, dermatologist-driven line.

Today, it's one of the most recognisable skin care brands in the world.

The Lauders became society fixtures, and were friends with the Kennedys, British Royalty, and world leaders.

As the Lauder name grew, Estée Lauder and her family acquired a slew of famous friends.

The Lauders would travel around the world for business and socialized with world leaders, actors, and social figures.

Among Estée Lauder's most famous friends were the Duke and Duchess of Windsor, and Jackie Kennedy.

By 1995, the Estée Lauder company hit the New York Stock Exchange for $3 billion.

The Initial Public Offering of The Estée Lauder Companies Inc. Class A Common Stock was on November 16, 1995, at a price of $26 per share.

Today, it's upwards of $65 a share (not adjusted for inflation.)

Last year, Estée Lauder had sales of $9.7 billion, according to its annual report to investors.

Though Estée Lauder herself passed away in 2004, her brand is still strong today. The Estée Lauder company owns 29 additional brands in over 150 countries, including MAC, Clinique, Origins, Bobbi Brown, and Smashbox.

It's also associated with some of the most beautiful faces in the world who have repped for the brand, including Elizabeth Hurley, Ashley Judd, Gwenyth Paltrow, and Chinese model Liu Wen.

The company is now largely run by Leonard, Ronald, and their children.

Like their fathers before them, the Lauder grandchildren were raised with the Estée Lauder brand, and all have rolls within the company.

Jane Lauder, daughter of Ronald, is now the company's Global President and General manager of Origins and Ojon.

Aerin Lauder is now a huge face in the beauty and fashion industries.

The sister of Jane, Aerin Lauder is a regular at society events, fashion shows, and premieres. She is currently the Style and Image Director at Estée Lauder and oversees all advertising, packing, and visual merchandising.

She's known for her sense of style and fresh face. In 2012, she even unveiled her own eponymous lifestyle brand Aerin that sells makeup, home goods and accessories.

And their cousin William P Lauder is the executive chairman after stepping down from CEO.

Leonard's son William P Lauder is the company's current Executive Chairman, after serving as CEO from 2004 to 2009 (though he admits to never liking it.)

His personal life caused a controversy in July 2007 when The New York Post reported he had fathered a daugther after an affair with Taylor Stein, a former real estate broker and daughter of a nightclub owner.

His brother Gary is also involved as Managing Partner at the brand, but stays out of the spotlight.

The Lauder clan donates heavily to philanthropic projects.

Leonard Lauder is a patron of the Whitney Museum, Chairman Emeritus of the University of Pennsyvania, and member of the President's Council of Memorial Sloan-Kettering Hospital, among many others.

Ronald Lauder is the benefactor of the Neue Gallery, Chairman of the Jewish National Fund, and President of the World Jewish Congress. Both he and his brother also donate heavily to the Lauder Foundation at the Wharton School of business.

But the family's major chairty is the Breast Cancer Research Foundation. Leonard's wife Evelyn (who passed away in 2011) co-created the Pink Ribbon concept, and the company donates heavily to the cause.

Both Leonard and Ronald are major art collectors.

Both brothers are huge patrons of the arts, and collect works from around the world.

It's also not uncommon for them to donate some of that art. Ronald, for instance, donated a Klimt portrait to the Neue Galerie that was worth $135 million, as well as a Van Gogh, Cézanne and Matisse.

Leonard also made headlines when he gave $1 billion worth of paintings and sculptures to the Met. There were 78 works of art in total from masters such as Picasso, Braques and Gris.

And the family also owns a vast amount of real estate.

Ronald owns homes in Washington, DC, an apartment in NYC's 740 Park Avenue, and two mansions in Palm Beach and the Hamptons.

Aerin's homes in Manhattan, the Hamptons, and Aspen have been extensively covered in Vogue, Elle Decor, and The New York Times.

And Leonard and Evelyn inherited Estée Lauder's Palm Beach mansion, where they were season regulars.

The company still faces some controversy: PETA accused the brand of animal testing.

Estée Lauder says on its website that it does not test products or ingredients on animals, 'except where required by law.'

But PETA accused the famous cosmetics brand of exporting animal testing to China in 2012.

Estée Lauder denies the claim.

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