The Estée Lauder Companies

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The Estee Lauder Companies to Market Michael Kors Fragrances; Luxury Brand Adds Depth, Dimension to Designer Fragrances Division

NEW YORK--(BUSINESS WIRE)--May 9, 2003--The Estee Lauder Companies Inc. (NYSE:EL) announced today that it has acquired Michael Kors Fragrances, the fragrance and beauty license previously held by American Designer Fragrances, a division of LVMH.

Terms of the deal were not disclosed. Michael Kors Fragrances will become part of The Estee Lauder Companies' Aramis and Designer Fragrances Division, which is led by Patrick Bousquet-Chavanne, Group President, and John Karp, President.

The Michael Kors fragrance business was launched in 2000 with his signature FiFi award-winning women's fragrance, MICHAEL. MICHAEL for Men was launched in 2001 and received awards from the Fragrance Foundation and Cosmetic Executive Women. A new women's fragrance, KORS Michael Kors, was launched in February 2003. All fragrances, as well as ancillary bath and body products, are currently sold in department stores, specialty stores, at freestanding Michael Kors boutiques and over the Internet.

"We are very pleased about this new alliance with Michael Kors L.L.C.," said Patrick Bousquet-Chavanne. "We believe that the brand has significant growth potential, and we look forward to a long and productive relationship with Michael and his partners, Lawrence Stroll and Silas Chou, all of whom have tremendous track records. I know we can count on their energy and talent to make this collaboration a great success. The team at American Designer Fragrances has done a very good job developing the Michael Kors concept, and the Michael Kors fragrances have been well-received in the marketplace."

Michael Kors stated, "I am so thrilled to become part of The Estee Lauder Companies. They are truly the bell-weather in the beauty business... it's what everyone else aspires to become. I know that with their expertise, my fragrance business is in the best of hands."

"Silas and I approached The Estee Lauder Companies about partnering with us to take Michael's fragrance business to the next level, and together we are mapping out a long-term strategy to strengthen the brand and remain true to Michael's vision," said Lawrence Stroll, Co-Chairman of Michael Kors. "We were the Company's first designer licensor with Tommy Hilfiger, and we look forward to new opportunities ahead with the Michael Kors business."

"Michael is a leader in the fashion world, and the Michael Kors fragrances further strengthen our position in the designer fragrance arena," said John Karp. "This will be a powerful complement to our other designer licenses - Donna Karan, Tommy Hilfiger and Kate Spade - each of which represents a unique and highly successful business."

Michael Kors is one of the leading American designers for luxury sportswear. His range of products through his Collection and KORS Michael Kors labels includes women's and men's ready to wear; women's shoes, handbags and eyewear, as well as a full line of fragrance and beauty products for both men and women. His products are available at leading department and specialty stores throughout the world, as well as freestanding retail locations in New York and Tokyo.

The Estee Lauder Companies is one of the world's leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. The Company's products are sold in more than 130 countries and territories under well-recognized brand names, including Estee Lauder, Aramis, Clinique, Prescriptives, Origins, M-A-C, La Mer, Bobbi Brown, Tommy Hilfiger, jane, Donna Karan, Aveda, Stila, Jo Malone, Bumble and bumble, kate spade beauty and Darphin.

The forward-looking statements in this press release, including those containing words like "will," "believe," and those in the various remarks involve risks and uncertainties. Factors that could cause actual results to differ materially from those forward-looking statements include the following:

    (i)    increased competitive activity from companies in the skin
           care, makeup, fragrance and hair care businesses, some of
           which have greater resources than the Company does;

    (ii)   the Company's ability to develop, produce and market new
           products on which future operating results may depend;

    (iii)  consolidations, restructurings, bankruptcies and
           reorganizations in the retail industry causing a decrease
           in the number of stores that sell the Company's products,
           an increase in the ownership concentration within the
           retail industry, ownership of retailers by the Company's
           competitors and ownership of competitors by the Company's
           customers that are retailers;

    (iv)   shifts in the preferences of consumers as to where and how
           they shop for the types of products and services the
           Company sells;

    (v)    social, political and economic risks to the Company's
           foreign domestic manufacturing, distribution and retail
           operations, including changes in foreign investment and
           trade policies and regulations of the host countries and of
           the United States;

    (vi)   changes in the laws, regulations and policies, including
           changes in accounting standards, tax laws and regulations,
           trade rules and customs regulations, and the outcome and
           expense of legal or regulatory proceedings, that affect, or
           will affect, the Company's business;

    (vii)  foreign currency fluctuations affecting the Company's
           results of operations and the value of its foreign assets,
           the relative prices at which the Company and its foreign
           competitors sell products in the same markets and the
           Company's operating and manufacturing costs outside of the
           United States;

    (viii) changes in global or local economic or other conditions
           that could affect consumer purchasing, the willingness of
           people to travel, the financial strength of our customers,
           the cost and availability of capital, which the Company may
           need for new equipment, facilities or acquisitions, and the
           assumptions underlying our critical accounting estimates;

    (ix)   shipment delays, depletion of inventory and increased
           production costs resulting from disruptions of operations
           at any of the facilities which, due to consolidations in
           the Company's manufacturing operations, now manufacture
           nearly all of the Company's supply of a particular type of
           product (i.e., focus factories);

    (x)    real estate rates and availability, which may affect the
           Company's ability to increase the number of retail
           locations at which the Company's products are sold and the
           costs associated with its executive offices;

    (xi)   changes in product mix to products which are less
           profitable;

    (xii)  the Company's ability to acquire or develop e-commerce
           capabilities, and other new information and distribution
           technologies, on a timely basis and within the Company's
           cost estimates;

    (xiii) the Company's ability to capitalize on opportunities for
           improved efficiency, such as globalization, and to
           integrate acquired businesses and realize value therefrom;
           and

    (xiv)  consequences attributable to the events that are currently
           taking place in Iraq and that took place in New York City
           and Washington, D.C. on September 11, 2001, including
           further attacks, retaliation and the threat of further
           attacks or retaliation.

CONTACT: Estee Lauder Media Relations: Sally Susman, 212/572-4430 Investor Relations: Dennis D'Andrea, 212/572-4384 or Michael Kors, L.L.C., Anne Waterman, 212/894-9265 SOURCE: Estee Lauder