The Estee Lauder Companies Acquires Rodan & Fields Skin Care Line

NEW YORK--()--July 18, 2003--The Estee Lauder Companies Inc. (NYSE:EL) Dermatologist-founded product line offering targeted approach to specific skin problems brings important new treatment opportunities to skin care business

The Estee Lauder Companies Inc. (NYSE:EL) announced today that it has acquired the Rodan & Fields skin care line launched in 2002 by Stanford University-trained dermatologists Katie Rodan, M.D., and Kathy Fields, M.D. Terms of the deal were not disclosed. The brand will become part of The Estee Lauder Companies' Specialty Brands portfolio, which is led by Dan Brestle, Group President. Dr. Rodan and Dr. Fields will remain with the Company as Co-Presidents.

"Our acquisition of Rodan & Fields is very timely," said Fred H. Langhammer, President and Chief Executive Officer of The Estee Lauder Companies. "Dr. Rodan and Dr. Fields are two highly respected dermatologists who have done an extraordinary job developing and positioning their line. We look forward to a productive and profitable long-term relationship that benefits from their experience as doctors and their understanding of how to apply their clinical knowledge to consumer needs at the counter."

"There are great opportunities to build the Rodan & Fields business," said Dan Brestle. "Consumers today have enormous respect for knowledge and expertise. Dr. Rodan and Dr. Fields, as practicing dermatologists who treat patients every day, are accomplished skin care authorities. Their product line merges the best of medical care with the cachet of prestige beauty. We think this concept has considerable consumer appeal and tremendous growth potential."

The existing Rodan & Fields line offers solutions for specific skin problems, targeting them with individually packaged, dedicated regimens trademarked as MULTI-MED THERAPY. Each color-coded regimen combines over-the-counter medications in a series of specific, step-by-step products that address each aspect of a particular skin condition. CALM addresses blemishes, breakouts and facial redness; CLEAN is aimed at blackhead extraction, and RADIANT combats uneven skin tone. There are also stand-alone compounds formulated to address certain types of dryness, irritation or redness. Each regimen is packaged in a kit containing a 60-day supply of products. The 18-SKU line is currently sold in three U.S. doors and over the Internet at rodanandfields.com.

"Joining forces with The Estee Lauder Companies is a dream come true for us," said Dr. Rodan. "Our passion is treating problem skin, and we'll be able to do much more with the resources of The Estee Lauder Companies. This agreement gives us access to a world of experts, research and development, and technology that a small company such as ours could never hope to access otherwise."

"We want to bring the dermatologist's experience to the counter," said Dr. Fields. "We've started out slowly, in a very select group of stores, but with The Estee Lauder Companies we will be able to reach many, many more clients while expanding the number of problems the Rodan & Fields product line can address. We're thrilled by the prospects and can't wait to get started."

Dr. Rodan and Dr. Fields founded the Rodan & Fields skin care business in 2002 with the mission of maximizing the health and well-being of skin through the proven results of the products they create. In 1992, Dr. Rodan and Dr. Fields created Proactiv(R) Solution, the number-one selling topical acne treatment in America, according to Guthy-Renker Corporation, the company that distributes the brand under license from the doctors. It has been used by over 3 million people and is sold via infomercial. Proactiv(R) Solution will continue to be licensed to the Guthy-Renker Corporation by the doctors.

The Estee Lauder Companies Inc. 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, Darphin and Michael Kors.

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

Contacts

The Estee Lauder Companies Inc.
Media Relations:
Sally Susman, 212-572-4430
or
Investor Relations:
Dennis D'Andrea, 212-572-4384
or
Rodan & Fields:
Tina Thomson, 626-395-9932

Contacts

The Estee Lauder Companies Inc.
Media Relations:
Sally Susman, 212-572-4430
or
Investor Relations:
Dennis D'Andrea, 212-572-4384
or
Rodan & Fields:
Tina Thomson, 626-395-9932