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Speaker 1: Leonard Lauder transformed his mother's small business into the global

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Speaker 1: beauty giant Estate Lauder. He also built one of the

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Speaker 1: most enviable cubist art collections in the world, valued over

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Speaker 1: a billion dollars. On this episode appeared up here, I

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Speaker 1: speak with Leonard about his experience in the beauty business,

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Speaker 1: about his art collection, and also about his philanthropy in

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Speaker 1: breast cancer and Alzheimer's research. So at the beginning of

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Speaker 1: this conversation I should point out to people that Leonard

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Speaker 1: has recently written a book called The Company I Keep,

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Speaker 1: My Life in Beauty. It's an excellent book about his

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Speaker 1: life in the in the world of beauty. So let's

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Speaker 1: go back to the very beginning. You were born in

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Speaker 1: New York City. Absolutely, Now, your mother is State Lauder,

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Speaker 1: but that was not her um name when she was born.

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Speaker 1: Her first name was not Stay, and her last name

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Speaker 1: was not Lauder. So how did that name come about.

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Speaker 1: She was Josephine Esther Lauder, and her and her pair

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Speaker 1: her mother was Hungarian and they called her St. E

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Speaker 1: s c Y, and so she loved that st better

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Speaker 1: than Josephine. When you were growing up, were you in

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Speaker 1: a wealthy family at that time, we were very, very

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Speaker 1: very poor. Remember this that this was the Depression. My

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Speaker 1: father had had a very successful business importing silk. Now,

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Speaker 1: silk didn't do too well during the depression, so he

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Speaker 1: his his company had to close down. And my mother

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Speaker 1: had always had ambitions to either be an actress or

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Speaker 1: to make people beautiful. And uh, I have a late

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Speaker 1: friend who had been a high school classmate of hers,

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Speaker 1: and he said she was always combing out of her

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Speaker 1: girlfriend's hair and making them look pretty. That's what she

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Speaker 1: loved doing that, and that became her advocation and vocation. Okay, Now,

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Speaker 1: when you're talking about your youth in New York City,

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Speaker 1: you do it in great detail in the book. How

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Speaker 1: can somebody remember things that happened eighty years ago? How

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Speaker 1: do you do that? David? It's easier to remember eighty

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Speaker 1: years ago than what I had for lunch today. I

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Speaker 1: understand that phenomenon. Okay, your mother is interested in making

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Speaker 1: people more beautiful, but I guess everybody likes to make

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Speaker 1: people more beautiful. So what is it that she did

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Speaker 1: that actually got her started in the cosmetics world. Well,

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Speaker 1: she started to sell the products that her uncle had made.

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Speaker 1: He was an Estraedian, and then she decided she could

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Speaker 1: do better, and she started making them in the kitchen,

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Speaker 1: and I, as a little kid, sitting in my high chair,

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Speaker 1: would watch her make the creams on the kitchen stove.

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Speaker 1: Then as time went on, she would invite people to

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Speaker 1: the house to do makeups, and I would come home

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Speaker 1: for lunch. Every day I would sit in the kitchen

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Speaker 1: eating my lunch and she'd be next door making making

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Speaker 1: someone's face up. But she was a miracle worker. Should

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Speaker 1: anyone who who came in there would and definitely walk

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Speaker 1: away looking fantastic. So when you're in high school, uh,

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Speaker 1: you went to which high school? Bronx High School or yeah, okay,

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Speaker 1: that's a pretty good high school. But did you have

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Speaker 1: time to help your mother and father in the company

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Speaker 1: at that time? I worked very often after school every

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Speaker 1: day except when I was I was on the soccer team,

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Speaker 1: so when I had soccer practice, I wasn't there. But

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Speaker 1: other than that, I worked every afternoon. And did they

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Speaker 1: pay you or they just said this as part of

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Speaker 1: growing up. Well, if the fifty cents and hours paid,

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Speaker 1: that's what I got. Okay. So you then went to

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Speaker 1: the University of Pennsylvania, where you graduated third in your class.

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Speaker 1: So what was it that you took out of the

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Speaker 1: University of Pennsylvania that you were a good business person

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Speaker 1: or you were a good scholar. What did you want

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Speaker 1: to be when you graduated. I wanted to be a

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Speaker 1: business I told my parents that's what I wanted to do.

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Speaker 1: I wanted to be in the business. But my father

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Speaker 1: wanted me to be a chemist. No, thank you, I

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Speaker 1: didn't want to be a chemist because I wanted to

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Speaker 1: do marketing. Okay, So you graduated the University of Pennsylvania

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Speaker 1: third in your class. You want to be in business.

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Speaker 1: So in those days people would say, well, I guess

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Speaker 1: I'll go to Harvard Business School. So you applied to

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Speaker 1: Harvard Business School and did they accept you? I got

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Speaker 1: turned down flat and which was which was a rather

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Speaker 1: shock for me. However, I made lemonade out of limits.

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Speaker 1: I applied for the US Navy Officer Candidate School. I

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Speaker 1: was accepted there and that was the beginning of my

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Speaker 1: PhD in leadership and it's the best thing I ever did.

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Speaker 1: So if you ever thought about how much more successful

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Speaker 1: your life could have been had you gotten into Harvard

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Speaker 1: busin of school, I wish the people at Harvard would know.

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Speaker 1: I would like to send them a thank you note

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Speaker 1: for what they did to Okay, so you go into

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Speaker 1: the U. S. Navy um where there are a lot

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Speaker 1: of uh, you know, young Jewish boys from the University

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Speaker 1: of Pennsylvania in the Navy with you. When I went

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Speaker 1: into the navy, Uh, my father said, you know, there's

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Speaker 1: no Jews in the Navy. I said, Okay, I know

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Speaker 1: that too. But that was that was good. That was

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Speaker 1: the way the United States was. The Jews are in

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Speaker 1: the minority. Everyone. Everyone was a minority then. But it

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Speaker 1: was fascinating because I grew up, in my view, at

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Speaker 1: the right time to grow up and learn. You you

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Speaker 1: don't grow up if you grew up in prosperity. You

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Speaker 1: don't understand how to fight. Part. I had a fight. Part.

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Speaker 1: So one of your activities in the Navy is running

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Speaker 1: the commissary on the boat you're on or a ship

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Speaker 1: you're on. So how did you manage to make that

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Speaker 1: a very profitable business sending you realize you were a

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Speaker 1: pretty good business person as a result of making the

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Speaker 1: commissary so profitable. Well, I became the ships star officer

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Speaker 1: aboard an aircraft carrier, an aircraft carrier had we had

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Speaker 1: three thousand men abroad the carrier, and so I had

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Speaker 1: to get everything that they needed and and and then some.

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Speaker 1: So I stopped to buy perfume that they could send

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Speaker 1: out as gifts to the parents, to their girl friends, etcetera.

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Speaker 1: For risk watches, toothpaste. Everything you wanted I had, and

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Speaker 1: I made it a point to have that so successful

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Speaker 1: that that supported the entire ships entertainment policy. After you

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Speaker 1: leave the Navy, you presumably could go do many things.

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Speaker 1: You could get a lot of business opportunities. Why did

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Speaker 1: you join your parents company? Because I knew I could

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Speaker 1: make it better. I had a vision of what the

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Speaker 1: company could be and would be, and I didn't have

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Speaker 1: to sell it to them because they I don't think

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Speaker 1: they could see the same thing that I saw. So

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Speaker 1: you joined the company? Was when you joined? Yeah, the

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Speaker 1: company has under a million dollars in revenue, more or

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Speaker 1: less dollars? Right? What was your job? Did you say

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Speaker 1: to your mother and father, guess what I'd like to

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Speaker 1: be the CEO. I'd like to be the CFO. What

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Speaker 1: was the job you actually had? My job description was son.

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Speaker 1: So I've always wondered when when you're in business with

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Speaker 1: your parents, do you do you call your your boss

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Speaker 1: mom or do you call her estay? I would call

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Speaker 1: her mom. However I would always address her in front

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Speaker 1: of other people as Mrs Lauder added respect and it worked.

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Speaker 1: It worked real look Um, they had trust in me

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Speaker 1: from way back. They said, oh, anything that Letton wants

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Speaker 1: to do, he can do. So your job was basically

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Speaker 1: everything that your mother and father didn't want to do,

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Speaker 1: and your mother was became the symbol of the company,

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Speaker 1: really was the face of the company. Is that right?

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Speaker 1: They she did everything, my father did everything, But I'm

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Speaker 1: as the one who sort of brought it together, and

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Speaker 1: my my vision was make her famous. Everything that I

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Speaker 1: could do to make her famous was a step in

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Speaker 1: the right direction, and she became world famous because of that.

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Speaker 1: What did you do to convince people that your mother's

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Speaker 1: products or your company's products were better than the competitors?

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Speaker 1: But two days. Firstly, she created the idea of giving

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Speaker 1: gifts away. At the beginning, she would give send out

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Speaker 1: a car a postcard, say bring this card into the

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Speaker 1: such and such a store and we'll give you a

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Speaker 1: free lipstick, or your free this or free that. Then

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Speaker 1: she built it up later on to say would give

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Speaker 1: you if you buy something, we'll give you a gift.

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Speaker 1: That that that was magic in those days. It was

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Speaker 1: really magic now when I tried to. When I became

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Speaker 1: I took over the sales area. In fact, as I

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Speaker 1: took over everything. I remember visiting the buyer of a

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Speaker 1: major department store. He wouldn't look at me, he kept

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Speaker 1: his back to me, cleaning his nails, and finally I

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Speaker 1: said to him, I think I can do great things

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Speaker 1: for you. I can, I can make you a lot

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Speaker 1: of money. And he turned her and said, how can

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Speaker 1: you do that? And then we were off and running

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Speaker 1: from there. So I was able to think of the

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Speaker 1: ideas necessary to make a hint and make a big

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Speaker 1: splash no matter where we were. So, at what point

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Speaker 1: did you realize the company was actually gonna be successful

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Speaker 1: in the sense that it was going to survive. Did

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Speaker 1: you always think that it was going to become a giant,

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Speaker 1: gigantic global company or did you have offers to sell

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Speaker 1: the company at some point when it's small and you

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Speaker 1: thought of not doing that. Well, my mother came one

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Speaker 1: day when I was in high school, saying, Charles Revson

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Speaker 1: offered me a billion dollars, but I turned it down

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Speaker 1: because I wanted to have the business feel. So it's

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Speaker 1: very grateful for that. Uh. I knew that we were

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Speaker 1: en route and we're out of the woods at the

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Speaker 1: beginning of nineteen uh seventy, and by that time the

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Speaker 1: company was in demand and I was then able to

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Speaker 1: turn around and focus on what we could do in

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Speaker 1: the future. Was there something about the products that were

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Speaker 1: better than the others? Do you try to make yours, say,

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Speaker 1: higher level, higher cost kind of products so that gives

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Speaker 1: it more prestige. They were much better products. They're expensive

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Speaker 1: and very very very good for the customers. Uh. Look,

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Speaker 1: at the beginning, we never advertised what what did we do?

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Speaker 1: We gave up samples, and gave up samples that were

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Speaker 1: large enough. If if you give a customer a sample

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Speaker 1: of a product and they like it, and they come

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Speaker 1: back and buy it again and again again, that's the

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Speaker 1: phillis of Bicious. So it was years before you even

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Speaker 1: started to advertise. Now, the brand that you had was

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Speaker 1: called stay Lauder. At some point you or somebody, I

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Speaker 1: think it was you, came up with the idea of

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Speaker 1: having a sort of competing brand called clinique. Right, So

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Speaker 1: what was the idea of building a product with a

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Speaker 1: different brand name that was competing with and effect your

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Speaker 1: other brand. By the time I started to work on

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Speaker 1: a clinique, which is in the late sixties, est Loader

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Speaker 1: was very successful by the time, and our customers were saying, look,

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Speaker 1: you've only grew intent this year. We need more, we

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Speaker 1: need more. I didn't want to push est Lauder into

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Speaker 1: a way of over promoting the brand because I knew

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Speaker 1: what I wanted to do. So yes, I said, if

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Speaker 1: I wanted to compete with st Loader, what would I do?

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Speaker 1: And that became the click. You know, Uh, it takes

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Speaker 1: a thief to catch a thief. Remember the movie with

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Speaker 1: with Carry Grant. It takes a thief. It takes a

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Speaker 1: thief to catch a thief. Now, when I go into

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Speaker 1: a department store, and I can't say I'm the biggest

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Speaker 1: shopper in department stores in the Western world, but when

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Speaker 1: I do go in, uh, usually on the first floor

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Speaker 1: right to your right, you smell some nice fragrances and

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Speaker 1: perfumes and so forth. And I always said to myself,

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Speaker 1: is that because uh, these products are are kind of

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Speaker 1: leaking out of the bottle or something like that. I mean,

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Speaker 1: I mean I thought they were air tight packaging. But

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Speaker 1: now in your book you kind of say, well, you

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Speaker 1: spray it around a little bit to attract people. Is

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Speaker 1: that right? Around? Springing straight? So it's very important, as

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Speaker 1: you point out in your book, to be at the

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Speaker 1: right location, and that you and your competitors, according to

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Speaker 1: your book, would kind of spar over who was going

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Speaker 1: to be in the right location in the department store.

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Speaker 1: Is that right? That's right. But that's why I said

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Speaker 1: to you that the main thing we were watching for

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Speaker 1: and doing was growth, because every department store in the

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Speaker 1: nation was built not just on the profits that they made,

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Speaker 1: but on the growth percentage. And I made it a

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Speaker 1: point that we would drive the business, our business faster

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Speaker 1: than any other store, any of the brand, of any

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Speaker 1: time in the store. So if the store had say

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Speaker 1: a ten percent increase, I wanted to have the increase.

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Speaker 1: If they had twenty, I wanted to have thirty. And

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Speaker 1: I always wanted to have a bigger increase than the

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Speaker 1: whole store would have. When that happened, I would get

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Speaker 1: all the support in the world. Now, if I would

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Speaker 1: go into a drug store and say I want to

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Speaker 1: buy an estate, law or product, I wouldn't be able

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Speaker 1: to find it. You tried very hard to not go

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Speaker 1: into drug stores and compete with people at the lower

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Speaker 1: price range. Is that right? And the reason why is

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Speaker 1: it makes people think and I guess it works that

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Speaker 1: your product is um more upscale, prestigious product. Well, it's

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Speaker 1: it's more than that though. Remember I just mentioned growth.

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Speaker 1: If you have one department store, and up and down

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Speaker 1: the main street there two or three or four drug

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Speaker 1: stores there. If you divide the business between the between everyone,

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Speaker 1: you will not have the growth in that one store.

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Speaker 1: By giving the the department store the growth at the beginning,

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Speaker 1: they were they were so happy with with what we

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Speaker 1: were doing. They gave us a space and location in

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Speaker 1: the store, so they didn't do more. And so the

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Speaker 1: result is we basically helped the department stores grow in

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Speaker 1: that era. If it wasn't for us, they wouldn't have

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Speaker 1: had the same growth. So at one point, your company

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Speaker 1: is doing so well that investment bankers who are not

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Speaker 1: shy come to you and say, why don't you take

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Speaker 1: it public? It was a family owned company. Did you

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Speaker 1: want to take the company public? We weren't ready yet.

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Speaker 1: We really weren't because when you are a privately welcome company,

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Speaker 1: you can invest a lot of money and doing what

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Speaker 1: do you think is right for the long term, and

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Speaker 1: not have to worry about it. So a few moments ago,

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Speaker 1: we're talking about the launch of the Clinique. The Clinique

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Speaker 1: caused US millions and millions of dollars of losses to

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Speaker 1: get the brand started, but we weren't public, and therefore

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Speaker 1: we could simply launch it and get it started, and

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Speaker 1: and and it happened. Well, now today it's harder to

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Speaker 1: launch a brand, and and and since we're public, we

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Speaker 1: now have to buy brands rather than launching, rather than

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Speaker 1: created them ourselves. You bought one or two extremely successful brands.

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Speaker 1: You might mention one or two of your most famous brands,

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Speaker 1: and you bought, well, they weren't so famous what we

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Speaker 1: bought them. But we we bought a company called Mac,

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Speaker 1: company called Bobby Brown, public called Joe Alone, compan called

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Speaker 1: Krim de la Mare, and and etcetera. So we would

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Speaker 1: buy a company that had a ready started itself, We

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Speaker 1: kept the entrepreneur working with us, and and that one

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Speaker 1: hey aided the other, and sooner or later we had

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Speaker 1: a whole portfolio of grants that competed with each other

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Speaker 1: as well as competing with in the marketplace. When your

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Speaker 1: company did ultimately go public at the end of the

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Speaker 1: last century, I guess it was then it's very public

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Speaker 1: what your company's worth and what your own net worth is,

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Speaker 1: And was that something you kind of didn't really want

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Speaker 1: to have people know how quite how successful the company was,

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Speaker 1: and people now realize how wealthy you are. Did it

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Speaker 1: change your life in any way? It never changed my life.

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Speaker 1: But I'd rather have no one know if I have

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Speaker 1: any money, I collect art and give it away. I

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Speaker 1: don't need to show my wealth. I like to spread

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Speaker 1: what I'm doing to make the people better off. Well,

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Speaker 1: let's talk about some of those things you've done. For example,

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Speaker 1: as a young boy, you got interested in in postcards,

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Speaker 1: and then you later built one of the biggest postcard

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Speaker 1: collections in I guess the world. What was the fascination

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Speaker 1: with postcards postcards in those days? With a snapchat of today,

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Speaker 1: I have postcards, I say, see what lunch today? They

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Speaker 1: would mail it before ten o'clock in the morning and

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Speaker 1: it would arrive in time for lunch at whether we're going,

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Speaker 1: so we don't realize that this this was before the

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Speaker 1: phone was used all the time to swim before emailably

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Speaker 1: for everything, and so that I love the idea of

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Speaker 1: postcards because I like the idea of instant communications. And

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Speaker 1: so what did you do with your postcard collection? You

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Speaker 1: still have it or did you put it in a

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Speaker 1: museum somewhere? Well, I've given any to the Views with

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Speaker 1: Fine Arts in Boston, and a good portion of it

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Speaker 1: to to the Nori Gallery uh in New York City,

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Speaker 1: which was started by my brother. I don't buy things

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Speaker 1: to possess them. I buy things to give them away,

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Speaker 1: only things that doesn't mean any to make. So um,

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Speaker 1: one of the things you've given away is your Cubist

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Speaker 1: art collection, which I told is one of the finest,

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Speaker 1: if not the finest, in the world. What is it

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Speaker 1: about Cuba start that made you want to collect it?

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Speaker 1: And why did you ultimately decide to give this billion

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Speaker 1: dollar plus collection to the Metropolitan Museum of Art in

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Speaker 1: New York of Firsially, it's a protest gift, which means

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Speaker 1: it goes to them to find my passing. I've already

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Speaker 1: given them almost ever already I love the idea of

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Speaker 1: creating things. Now if I if I buy a post start,

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Speaker 1: it could cost me anyway anywhere between five cents and

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Speaker 1: a dollar or five or ten day. If I buy

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Speaker 1: a Picasso painting, I could pay fifty and a hundred

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Speaker 1: thousand dollars for it. So to me, I love the

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Speaker 1: hunt of the search, and then I love at the

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Speaker 1: same time the act putting it together for a museum

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Speaker 1: and giving it away. So every time I give something away,

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Speaker 1: I give them money to display it and do exhibitions.

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Speaker 1: So you're now one of the wealthiest people in the

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Speaker 1: United States, but when you're building your art collection, you

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Speaker 1: weren't quite as wealthy. So did you have to worry

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Speaker 1: about getting coming up the money to buy these Picassos? Absolutely,

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Speaker 1: I was in debt. I was up to my ears.

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Speaker 1: You've also been involved with the Whitney, and we're the

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Speaker 1: chair of the Whitney Museum of Art in New York

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Speaker 1: for a long time and bigger, the biggest donor. What

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Speaker 1: was it about the Whitney that made you so attracted

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Speaker 1: to it? I help. I bought thousands of works of

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Speaker 1: art for them, And I like making museums successful because

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Speaker 1: when I was a kid, three afternoons out of five

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Speaker 1: after school of I wasn't doing something else. I was

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Speaker 1: in a museum looking at things, and I love museums

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Speaker 1: and I wanted to make them greatly, greater and greater.

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Speaker 1: Let's talk him for a moment about another thing you've mentioned.

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Speaker 1: Your first wife, UM was very involved with breast cancer.

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Speaker 1: She had had breast cancer, and you and she put

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Speaker 1: together a foundation to work on breast cancer. Um you're

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Speaker 1: still involved with that, is that right? Absolutely? Yeah. And

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Speaker 1: your mother, as you point out in the book in

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Speaker 1: the latter years, suffered from some Alzheimer's and you've also

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Speaker 1: been involved with Alzheimer's research. Is that an important cause

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Speaker 1: for you as well? Very important? We my brother and

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Speaker 1: I both created the Alzheimer's Drug Discovery Foundation. We're a

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Speaker 1: pure playing We just do drug discovery for prevention and cure.

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Speaker 1: We don't do care, we don't do anything else. But

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Speaker 1: the research that we're doing is amazing, and in my

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Speaker 1: lifetime we're going to have a prevention and a cure

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Speaker 1: for Alzheimer's and related diseases. So what do you attribute

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Speaker 1: your obviously sharp mind at your age and good physique

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Speaker 1: at your age? What did you do you exercise a lot?

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Speaker 1: How do you keep mentally sharp. What's the key? I

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Speaker 1: exercise a lot number one, and don't forget this that

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Speaker 1: everyone should know this. The brain is a muscle and

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Speaker 1: if you don't use it, you lose it. So that

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Speaker 1: each day I'm doing something not doing the courser puzzles

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Speaker 1: to activate my interest. We will read the newspaper, the mine,

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Speaker 1: and we'll discuss the matters and where's this leading to?

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Speaker 1: And I'll make predictions. By the way, I'm very good

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Speaker 1: about seeing the future. So I don't have my crystal

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Speaker 1: both of me, but I can lend it to you

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Speaker 1: from time to time, and I can see the future

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Speaker 1: and I and I work with that, with that knowledge

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Speaker 1: to help in all the things that I'm doing. Okay,

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Speaker 1: any regrets in this life story you've put together, anything

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Speaker 1: you wish you differently, none whatsoever. I really I love

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Speaker 1: every step along the way. I've never regretted anything. I look.

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Speaker 1: If you can't build your life based on what you're

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Speaker 1: looking back to, uh, you can only build your life

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Speaker 1: by looking forward to it to everything. Well, Leonard, thank

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Speaker 1: you very much for a very interesting conversation, and I

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Speaker 1: enjoyed reading your book The Company I Keep. Thank you,

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Speaker 1: David god bless you. Thanks for listening to hear more

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Speaker 1: of my interviews. You can subscribe and download my podcast

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Speaker 1: on Spotify, Apple, or wherever you listen