America's Obsessives: The Compulsive Energy That Built a Nation (35 page)

During the week that she spent in each town opening up a new store, she followed a carefully honed protocol that relied heavily on her obsessions and compulsions. Before attaining vast wealth, she owned just one or two expensive outfits, which she wore over and over again, and everything about her appearance was perfect, including, of course, her personal hygiene. “I’d always be immaculate,” she later wrote. “If you looked shabby or tired or messy, no one in the world would be interested in your opinion on what sells in the beauty field.” She would meet with and touch the face of every beauty editor in town. Behind her perfectly decked-out counters—making the most of every inch, the detail-oriented designer turned each one into “a tiny, shining spa”—Lauder would also touch the face of every customer in sight. And she was goaded on by her relatively mild number fetish. While she wasn’t a rabid counter like Jefferson, Heinz, Dewey, or Kinsey, this hard-nosed businesswoman still enjoyed doing a certain amount of tallying. “Measure your success in dollars, not degrees” would emerge as a favorite maxim. For each day, she set monetary goals—typically a nice round number such as $1,000. Toward the end of business one afternoon in Houston when she was making her first foray into the Sakowitz store, she took off her shoes and counted her receipts. Her take stood at $998, which threw her into a temporary tizzy. “Oh no,” she said to herself, as she rushed to meet a woman who had just made it through a closing door. Quickly slipping her shoes back on, she started hawking some eye cream that sold for $2.95. In an effort to clinch the sale, she startled the customer by announcing that the cream would smooth out the wrinkles on the side of her mouth. “That did it,” Lauder later wrote. “Letting my shoes drop off, I sank into my chair and grinned my most victorious grin.”

But like other obsessives, Lauder would rarely stay put for long. “She rests,” a colleague once told
Mademoiselle
, “by doing something else hard.”

To use a beauty metaphor, Youth Dew, first introduced at Bonwit Teller in 1953, would lay the foundation for Lauder’s worldwide cosmetics empire. By the mid-1950s, the perfume, which she would compulsively spritz wherever she went—including elevators and restaurants—would generate about 80 percent of her sales at department stores. “It was impossible to get rid of the smell. It lasted forever,” recalled Marylin Bender. And Lauder would mine this core characteristic to bring Youth Dew (and thus her entire treatment line) to the land of Chanel. When the buyer at the Galeries Lafayette in Paris would not see her, Lauder spilled a considerable amount on the floor. Over the next couple of days, as the fragrance lingered, customers kept asking about the source, and the department store soon had no choice but to carry it. Spritzing became a permanent part of her playbook. “Whenever I have a fragrance promotion,” she wrote in 1985, “I ask my salespeople to spray some scent on the counters, and in the air to attract the customer.…My little Parisian ‘accident’ set the stage.”

With Youth Dew putting her on the map, Lauder felt emboldened to make an experiment. In 1957, she brought out a moisturizing cream called Re-Nutriv—the moniker highlighted its supposedly medicinal properties—for which she charged a staggering $115 ($950 today) for a sixteen-ounce (one-pound) jar. While critics insisted that the sticker price would scare away customers, she sensed that the opposite might be true. Her gamble was a radical move. Until then, all her products had been moderately priced; Youth Dew Bath Oil, for example, cost from $3.75 to $22.50, depending on the size of the container. Likewise, the upscale creams manufactured by competitors such as Helena Rubinstein typically retailed for under $30 for an eight-ounce jar.

As Lauder predicted, her “Crème of Creams” elicited lots of free media coverage precisely because of its sky-high price. She also took out full-page ads in
Harper’s Bazaar
and
Vogue
featuring a Hitchcockesque model under the headline, “What Makes a Cream Worth $115?” (Lauder had not yet begun hiring her string of famous blonde and blue-eyed models, such as Karen Graham, the company’s official representative in the 1970s and 1980s, whom the public often assumed was her.) By way of explanation, the accompanying text alluded to “the rare perception of a woman like Estée Lauder who knows almost better than anyone how to keep you looking younger, fresher, lovelier than you ever dreamed possible.” It would be hard to contest this assertion, as Rose Mentzer’s youngest daughter had indeed been thinking of little else for decades. The ad also referenced some rare ingredients, such as turtle oil and royal jelly, and twenty secret ingredients, to which only members of the family were privy. The claim of high production costs noted by her copywriters, however, was less well grounded, as Lauder herself would acknowledge.

Quoting from the sales spiel that she delivered in department stores across the country, she wrote in her autobiography: “‘Why do you spend so much for a Picasso? The linen under his painting costs two dollars and seventy-five cents, each jar of paint he used was perhaps a dollar seventy-five—perhaps the material cost a total of eleven dollars. Why, then, do you pay a small fortune for a small picture? You’re paying for creativity, that’s why.’” Remarkably, few customers, journalists, or industry analysts were troubled by her grandiose comparisons, and the cream flew off the shelves. This campaign, wrote British author Mark Tungate in his book,
Branded Beauty: How Marketing Changed the Way We Look
(2011), “combined all the best (or worst) attributes of beauty marketing: snobbery, emotional blackmail, the cult of celebrity, faux continental sophistication, and pseudo-science.” She had devised a magic formula, which would transform her industry. While Lauder was still a relatively small player—sales did not hit $1 million until 1960—rival firms were already beginning to copy her when developing and marketing new products.

By 1965, sales were up to $15 million, as Re-Nutriv led to huge new income streams. In its new manufacturing plant on Long Island, the company also churned out large jars, which looked like Fabergé eggs, priced at a few hundred bucks a pop. Lauder also stuck tiny dabs in other products, such as face powder and lipsticks, which helped her justify the high prices for her “prestige brand.” In 1962, for example, she charged $3.50 for her new “French Peach” lipstick, which, as the
New York Times
ad noted, featured “the creamy richness of her Re-Nutriv formula.” That year, few other lipsticks ran anywhere near $3; Arden’s Regal Red Lipstick cost $2 and Revlon’s Lustrous Lipstick cost only $1.10. As a rule, retail prices for lipstick have always been based on higher markups than any other beauty product. As Andrew Tobias has reported, the Nail Man’s costs for Lustrous Lipstick came to only 9.6 cents per tube; her gross margins for those Re-Nutriv–laced lipsticks were, in all likelihood, also over 90 percent.

Lauder plowed a sizable chunk of her excess cash into trophy real estate. As with other obsessives, her homes emerged as a vehicle through which she could express her love of organizing and collecting. In 1955, after reaping the first wave of Youth Dew profits, she moved out of her West End Avenue apartment and into her first Upper East Side town house, which, despite its gold-plated bathroom fixtures, she would later dismiss as “informal.” A few years later, she bought her first place in Palm Beach, a small Spanish-style dwelling located on Route Trail, then the least fashionable part of the tony town.

Over the next decade, she upgraded. In 1964, she switched to a villa on the ocean in Palm Beach—“an English home, not a beach home,” as she was fond of saying. Three years later, she dropped $500,000 (about $10 million today) on a twenty-five-room, eight-bathroom, nine-fireplace town house on East Seventy-Fifth Street in Manhattan, which most visitors referred to as “a castle.” As the
New York Times
reported shortly after her move-in day, the living room, whose walls were draped with Flemish tapestries, was so massive that the grand piano in the corner “looked like an abandoned toy.” The powder room on the main floor was lined with shelves overflowing with her cosmetics—lipsticks, face powders, and rouges, as well as her Re-Nutriv Cream (fittingly enough, as it was “the cream that bought the house”). As she proudly reminded the
Times
, her crème of creams, whose price was then $20 an ounce, “is the most expensive in the world and is our greatest seller.” Of her rationale for leaving out all that product, she explained: “I want my guests to be able to do their faces over completely.” (That explanation may have been only half true; she probably also relished the chance to get in a little extra face touching.)

By 1967, Lauder also owned a villa in Cannes, which she described in her autobiography as “immaculately clean.” According to the
Boston Globe
, the neatnik “liked lots of shine” in her homes; maids were constantly waxing her
already waxed
drawing room floors with furniture polish. Not one to deny herself any material comforts, Lauder would later acquire an apartment in London—the blue-and-white wallpaper in her bedroom was modeled on that used by Jefferson in Monticello—as well as a massive home with Corinthian columns on Long Island. But like Lindbergh, she felt more comfortable on the go than at any of her palatial homes stuffed with Chippendale furniture and Meissen china. As the late fashion maven Eleanor Lambert has stated, “Estée let her houses live her…she didn’t live in them.”

By the early 1960s, Lauder had finally attained the vast wealth of which her public persona (“Estée Lauder”) had long been boasting and her private persona (“Esther Mentzer”) had long been dreaming. She now set her sights on developing the prominent social connections that she might have already had, had she actually descended from Viennese aristos. This step was all about business. “Her Palm Beach social life,” William Lauder told me, “embodied what the brand stood for.” The society pages constituted another theater in her ongoing war with her rivals such as Revlon—which, in the late 1960s, was still more than ten times the size of her company—and the fierce competitor dug in her heels. “The icons of fashion, those were the sophisticated people whom we were trying to reach,” said Michael Gibbons, a retired marketing executive who began his long career with the company in 1967.

Of Lauder’s attempts to ingratiate herself with her rich and famous “targets,” Erica Titus Friedman, a frequent luncheon companion, has stated, “She tried too hard, but she was
very
determined.” Just as Lauder used gifts to win customers, she distributed baskets of her products to gain entry into the balls and benefits held at Palm Beach’s exclusive venues such as the controversial Everglades Club (which to this day has few, if any, Jewish members). In the mid-1960s, she reeled in the biggest fish of all—the Duchess of Windsor, whom she called “the most attractive woman in the world.” In Lauder’s version, they first met aboard an ocean liner and it was the Duchess who was eager to meet
her
: the Duchess had long been such a fan of hers that the Elizabeth Arden rep who made her up before parties used Estée Lauder products. But a more likely explanation, now widely accepted, is that their relationship began through a carefully orchestrated surgical strike; one day, just as the Duchess and her husband, the former King Edward VIII, were about to board a train bound for New York at the West Palm Beach station, Lauder “accidentally” bumped into her in front of a photographer, whose snapshot soon was transmitted around the world. However the bond was forged, it solidified quickly.

Within a couple of years, Lauder was hosting the couple’s anniversary dinner and papers were reporting that her personal friend the Duchess does not “hesitate to test the newest Lauder products and tell [her] buddy if it’s good or bad.” Her social circle would also include Princess Grace of Monaco and her Palm Beach neighbor Rose Kennedy, a frequent visitor to her home for afternoons of tennis and a makeover.

As a CEO, Lauder could appear flighty—in business meetings, she often rambled—but she was totally focused when she had to be. “She sees and absorbs everything,” a company executive once told
Vogue
. “You may think she has forgotten or not noticed, but when there is a scrap of information to fit in with a lot of others, it’s there—been there all along.” Michael Gibbons recalled a trip to Chicago with her in 1969 to open up a counter at Bonwit Teller, which had just completed its move across Michigan Avenue. “At a party at the store the evening before the opening, a Revlon executive was upset with its company’s location on the floor. Afterwards, at dinner, she told me and my colleagues, ‘They are going to move us.’ We did not think it possible. But she insisted that we go back after dinner. At 11:30 that night, we moved our booth back where it was originally supposed to go.”

By the late 1960s, Lauder had handed off the day-to-day operations of the company to Leonard, then in his thirties. The working alliance between the self-described “stern taskmaster…[who] expected perfection…and then a little more perfection when perfection is offered” and her elder son was not always smooth. A decade earlier, on Leonard’s first day on the job, Lauder announced that she and Joe were going on a two-month vacation to Florida; while Leonard was often jolted by her mercurial and demanding ways, after several years, they ironed out the kinks. She remained the company’s public face who had final say over all products—she hated false eyelashes, so they were nixed.

In 1973, when the thirty-nine-year-old Leonard officially replaced her as president, he described himself to Marylin Bender as a cross between his parents. A perfectionist like his mother, he was driven by a fierce ambition that could “keep everyone on their toes.” To motivate his staff, Leonard would blurt out, “I
want
you nervous. I want you to be nervous. Are you nervous?” And like his father, he could “direct and organize vast logistical movements.” In contrast to Leonard, who said nothing publicly about the tension, Lauder alluded to “many heated discussions” in her autobiography. “My father,” William Lauder explained to me, “was her son as well as her business partner and rival. But the relationship was symbiotic. They both recognized that they needed each other. He could not do what he wanted without her, and she could not do what she wanted without him.”