Turning the business of beauty into a global culture
Founded by the daughter of east European Jewish immigrants in 1935, Estée Lauder is one of the world’s top five beauty conglomerates, with global sales totalling $9.7 billion last year and 28 brands including Aramis, Aveda, Clinique, Jo Malone, Kate Spade, Missoni, Origins, Donna Karan, Michael Kors, Tommy Hilfiger, Tom Ford Beauty and Coach.
John Demsey joined Estée Lauder in 1991 after earning degrees at Stanford and New York University, and holding executive positions at Revlon, Bloomingdale’s, Macy’s, Benetton and Saks Fifth Avenue. Since 2006, he has been third in command at corporate headquarters on Fifth Avenue.
But Demsey still travels downtown often, to MAC Cosmetics’ spartan, ultra-modern headquarters in Soho. (MAC stands for Make-up Art Cosmetics.) The company is the third largest brand in the Estée Lauder corporation and had more than $1 billion in turnover last year. It remains under his purview and is, he admits, his first love.
Demsey was appointed president of MAC when Estée Lauder completed its purchase of the company in 1998. Under his watch, MAC expanded from 19 to more than 75 countries and territories.
What Demsey calls MAC’s “global palette” includes 1,450 stock-keeping units. “Our foundations go from the bluest, darkest black to the palest porcelain white,” he says.
“We sort the range of products based on geography. If you walk into a store in Beijing or Vietnam, in Scandinavia or Johannesburg, you are going to see a different assortment of MAC products . . . You would see stronger corals in Germany, blue-reds in Nordic markets, vivid purples in Italy, more matt nudes in Brazil.”
MAC’s company handouts refer to it as the “cult make-up authority”. The word “cult” is appropriate, Demsey insists. MAC was founded in Toronto in 1984 by Frank Toskan and Frank Angelo, a make-up artist and a hairdresser. Its products were intended for professional use.
“The original followers of the brand were make-up junkies, musicians, models, fashionistas and a lot of transvestites,” Demsey explains. “Because of the flamboyance that can be accomplished through the high pigmentation and long wear of the products themselves, the brand became incredibly popular in sub-culture groups.”
MAC did not evolve through traditional advertising or mass distribution, Demsey continues. “It was established by word of mouth, built in a viral way. The way people joined up with the brand was cult-like and almost religious in its fervour, so we are considered to be a cult.”
Most of Estée Lauder’s brands target specific age or demographic groups. Not MAC. “The positioning is all ages, all races, all sexes,” says Demsey. “The thing that is unique about the brand is that a quarter of our customers are under age 25, and a quarter are over age 45. You’re as apt to see my 80-year-old mother in a MAC store as you are to see my 18 year-old god-daughter.”
MAC salespeople are required to wear black, a precept followed also by staff at MAC headquarters.
“From the beginning, the company didn’t want people in competition in terms of who could afford to wear what to work,” Demsey explains. “You don’t need a lot of money to put on a black Gap T-shirt and a pair of black jeans. And you can be any size, because everybody looks good in black.”
The MAC Aids Fund will mark World Aids Day tomorrow by raising funds in its stores. That too has become a tradition. The fund was started in 1994, before Estée Lauder purchased the company, and was perpetuated by Demsey, who has served on the boards of at least a half dozen Aids charities.