Estee Lauder's new chairman will be Leonard Lauder as company goes public.
This article was originally published in The Rose Sheet
Executive Summary
ESTEE LAUDER FY 1995 U.S. SALES RISE 10.4% TO $1.54 BIL., according to the preliminary prospectus for an initial public offering filed by Estee Lauder on Sept. 21. Worldwide Estee Lauder sales advanced 12.5% to $2.9 bil. for the 12-month period ended June 30, 1995. Skin care sales represent 41.9% ($1.22 bil.) of worldwide sales. Makeup constitutes 34.6% of consolidated sales while fragrances generate 23.5% of sales. Estee Lauder hopes to raise $335 mil. from the stock offering.
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ESTEE LAUDER FY 1995 U.S. SALES RISE 10.4% TO $1.54 BIL., according to the preliminary prospectus for an initial public offering filed by Estee Lauder on Sept. 21. Worldwide Estee Lauder sales advanced 12.5% to $2.9 bil. for the 12-month period ended June 30, 1995. Skin care sales represent 41.9% ($1.22 bil.) of worldwide sales. Makeup constitutes 34.6% of consolidated sales while fragrances generate 23.5% of sales. Estee Lauder hopes to raise $335 mil. from the stock offering. The "red herring" preliminary prospectus does not elaborate on the number of Class A shares that will be sold, nor does it estimate a per-share price. Net proceeds of the offering are slated for "general corporate purposes," according to the filing. The offering is being underwritten by Goldman Sachs, Dillon Read, Merrill Lynch, and J.P. Morgan Securities. According to the prospectus for the 49 year-old company, Estee Lauder's five established brands -- Estee Lauder, Clinique, Prescriptives, Origins and Aramis -- garnered a combined 39.5% share of cosmetics sales in 1994 at the 2,800 U.S. department and specialty store doors in which the brands are carried. Estee Lauder is still brand-hungry, however. The prospectus reports that Estee Lauder plans to "effect a recapitalization" prior to the IPO that will give the company a majority stake in Make-Up Art Cosmetics, the manufacturer of M.A.C. makeup. In February, Lauder entered into a joint venture with the Toronto-based firm to distribute the line outside of North America ("The Rose Sheet" Feb. 13, In Brief). At that time, Lauder Family Partners, an affiliate of Estee Lauder, held a majority equity interest in the firm. Concurrent with the public offering notice, Lauder announced several management shifts, including the bestowal of the title -- founding chairman, The Estee Lauder Companies -- on former acting Chairman Estee Lauder. Leonard Lauder, previously CEO and president of the firm, will become chairman and CEO. The post of president will go to current Chief Operating Officer Fred Langhammer. Langhammer, who has been with Estee Lauder since 1975, has been CEO and executive VP of Estee Lauder since 1985. From 1982 to 1985, he served as managing director of the company's division in Germany. He began his stint at the firm as president, Estee Lauder-Japan. VP/General Manager-Origins Natural Resources William Lauder has been named president of Origins Natural Resources, Inc. Ronald Lauder holds onto the chairman positions at both Clinique Labs and Estee Lauder International. Other Lauder family members will retain their positions within the company, Estee Lauder said. The Lauder family is not loosening its grip on its empire. The prospectus indicates that Lauder family members will own all Estee Lauder Inc. Class B common stock. Class B shareholders will be entitled to 10 votes per share whereas Class A stockholders will be permitted one vote per share. "Accordingly," the prospectus states, "Lauder Family Members, if they vote in the same manner, will for the foreseeable future be able to select all of the company's directors and determine the disposition of practically all matters" submitted to a vote. |