2016 in review: The Estée Lauder Companies – buy, buy, buy

2016 in review: The Estée Lauder Companies – buy, buy, buy

The Estée Lauder Companies’ year has to be characterized by its largest acquisition on record: the purchase of Too Faced Cosmetics for US$1.45 billion

But that wasn’t Lauder’s only acquisition of the year – the US prestige giant indulged in a positive spout of spending sprees, picking up Becca Cosmetics and French fragrance brand By Kilian over the course of the year.

However, it wasn’t all ‘if you can’t beat ‘em buy ‘em’ – Lauder’s stable was enhanced by a number of innovative in-house creations to boot – first with Amber Rose and Donald Robertson teaming up to form a break-off brand, Flirt Cosmetics. Then with Victoria Beckham creating a sell-out capsule collection for the signature Lauder brand, which is rumored to be the first of many – and, of course, with the queen of collaborations MAC continuing its genius tie ins – the Taraji P Henson collection was a particular highspot.

And sell-outs led to strong sales – the company put in a solid performance in fiscal 2016, with revenue up 4 percent (7 percent adjusted), thanks in no small part to the buoyant make-up category. And while growth tailed off slightly in the first quarter of fiscal 2017 (with net sales up 1 percent), the company is still predicting growth of 3 to 4 percent for the second quarter, due to be announced in the New Year.  And things are looking even better for Lauder’s star turn – Tom Ford Beauty. The brand is poised to become a billion dollar brand by 2020.

If one thing has defined Lauder’s year, it’s a drive to reach that lucrative millennial consumer. To that end, it’s even recruited a pack of youngsters to brainstorm ideas at its Manhattan HQ. Lauder also extended the distribution of its millennial-focused Estée Edit collection, first launching in Sephora stores and then opening its very own standalone store in London for this digital-first brand.

Indeed, a move to standalone has somewhat defined Lauder’s retail strategy this year as department store sales dwindle. A combination of e-commerce and branded stores was touted as the future for the prestige beauty giant in China, and the success of an Aveda pop-up led to a wider roll out of branded barber shops.