The Estee Lauder Companies Announces Internet Strategy to Maximize Marketing Opportunities; Integrate Distribution Channels; and Enhance Brand Equity.

    Business & Technology Editors

    NEW YORK--(BUSINESS WIRE)--April 12, 2000--

   Estee Lauder Brands to be Offered Exclusively on New Multi-brand
  Site; Expanded Individual Brand Sites; and Select Retailers' Sites

   Acquisition of gloss.com to Accelerate Implementation of Strategy

    The Estee Lauder Companies Inc. (NYSE: EL) announced today a
comprehensive Internet strategy which will expand the Company's
leadership role in the online cosmetics industry. The Company's
diverse portfolio of prestige brands, which appeals to a broad range
of consumers, is uniquely positioned to capitalize on the enormous
marketing opportunities presented by the World Wide Web.

The strategy has three major goals:

--  to develop a powerful database by interacting directly with vast
    numbers of consumers, adding a new dimension to the Company's
    marketing efforts;

--  to increase sales in all channels by integrating traditional and
    online distribution;

--  to enhance the well-established equity of the Company's brands by
    developing and maintaining a three-tiered Internet presence, where
    the Company's brands will be available exclusively.

The strategy includes the following components:

--  a content-rich, multi-brand beauty site with a distinct identity
    that will offer prestige brands from The Estee Lauder Companies'
    portfolio. The site is expected to launch by early 2001;

--  additional individual sites for the Company's prestige brands,
    building on the success of the Clinique, Origins and Bobbi Brown
    essentials sites, which have all developed substantial databases
    of registered users. All brand sites will encourage traffic to the
    multi-brand site through direct links;

--  specially-designed microsites--"stores-within-stores"--that will
    be available on certain retailers' e-commerce sites. These
    microsites will convey the unique image and experience of each
    brand within the retailers' sites.

    To accelerate the implementation of its online strategy, The Estee
Lauder Companies has agreed to acquire gloss.com, a popular Internet
beauty site. Gloss.com will be incorporated into ELC Online, which
directs the Company's Internet activities.
    Fred H. Langhammer, President and Chief Executive Officer of The
Estee Lauder Companies, said, "The opportunities for The Estee Lauder
Companies on the Internet are immense. The strategy we are announcing
today will allow us to interact directly with millions of consumers,
inviting them to experience our brands in an entertaining and
informative way. Our specially-designed modules and sites--the only
authorized outlets for our brands on the Internet--will maintain the
strong brand equity we have built over the years. Our strategy also
allows us to integrate our traditional and online distribution
channels, which we believe is the most effective approach to this new
marketplace. All of this builds overall demand for our brands and adds
an exciting new dimension to our marketing efforts.
    "Our role as a pioneer of beauty online--beginning in 1996 when
Clinique launched its extensive site--has served us well in developing
this Internet strategy. Today, the number of registered users on the
Clinique site is growing at the rate of some 40,000 members per month.
Our more recent launches, the Origins and Bobbi Brown sites, are also
very successful. In fact, collectively, the Websites of Estee Lauder
Companies' prestige brands have more than one million registered
users. The opportunities for dramatically expanding and leveraging
this database are enormous.
    "Finally, our acquisition of gloss.com--whose talented managers
and employees have both Internet experience and beauty industry
expertise--will be a great asset as we drive our strategy forward."
    Estee Lauder Companies' Internet activities will be developed,
coordinated and executed by ELC Online, headed by Angela Kapp, Vice
President and General Manager. Ms. Kapp has been leading the Company's
Internet efforts since 1995, including the development of the
Company's Clinique, Bobbi Brown and Origins Websites.
    The impact on earnings of the Company's overall Internet strategy
is expected to be immaterially dilutive for the first two years and
accretive thereafter.

Acquisition of gloss.com

    The acquisition of gloss.com is subject to certain notices,
consents and waiting periods, such as Hart-Scott-Rodino, and is
expected to be completed in the next few weeks.
    The gloss.com team's solid understanding of the Internet, combined
with its expertise in beauty merchandising and in developing
compelling editorial content, will provide additional talent to the
existing ELC Online operations.
    Sarah D. Kugelman, President and Co-founder of gloss.com, said,
"The entire gloss.com team, including my co-founders Deanna Kangas and
Michael Hananel, is thrilled to be a part of The Estee Lauder
Companies, the world leader in prestige beauty. The strategy they have
developed--which will utilize our special expertise in both the
Internet and the beauty industry--demonstrates their understanding of
the Internet's great potential as a marketing tool. We look forward to
being a part of the team that will set a new standard for beauty
online."

Multi-brand Site Responds to Consumer Demand

    The Estee Lauder Companies' multi-brand site will offer consumers
an exclusive selection of prestige beauty brands in a single online
environment. Extensive consumer research conducted by the Company
indicates that 75% of prestige online beauty consumers show a strong
preference for a multi-brand site. Of this group, 90% indicated that
they would buy from a site that featured only Estee Lauder Companies
brands.
    The site will feature dynamic content along with interactive
features and personalized recommendations. Through up-to-date trend
and product information, expert beauty advice, store locators, and
information on special retail promotions, the site will continue The
Estee Lauder Companies' rich heritage of educating and servicing its
consumers. The multi-brand site will, in effect, integrate the online
and physical shopping experiences through content that encourages
shopping in all channels.

Continued Expansion of Individual Brand Sites

    Building on the success of its individual brand sites in
developing rich consumer databases, the Company will expand and enrich
these sites and will launch additional sites for its other prestige
brands. Links from the individual sites will encourage traffic to the
multi-brand site, where consumers can explore the range of prestige
brands offered there.

The Estee Lauder Companies' prestige brand sites with content and
e-commerce components are:

         www.clinique.com
         www.bobbibrown.com
         www.origins.com
         www.esteelauder.com        (scheduled for Spring 2000)
         www.maccosmetics.com       (scheduled for Spring 2000)

Specially-designed Modules for Retailers

    Select retailers that currently sell the Company's brands in their
stores will now be able to sell them on their own e-commerce sites.
For those retailers that meet specific requirements, the Company will
develop and maintain "stores-within-stores" that, like retail
counters, will reflect the distinct image and positioning of each
brand.
    "Our plans for the retailers' sites extend our bricks-and-mortar
relationships significantly," said Mr. Langhammer. "Our retailers have
embraced this strategy and are enthusiastic about the opportunities it
creates. We are particularly pleased to offer online consumers the
same Estee Lauder Companies' brands they are accustomed to seeing in
their favorite stores."

Internet Strategy Capitalizes on Company's Unique Strengths

    Commenting on the overall strategy, Mr. Langhammer concluded, "The
successful Internet business model must address more than just
products. For the past fifty years, The Estee Lauder Companies has
been building its prestige brands and developing an unrivaled level of
consumer loyalty. We have also established very strong relationships
with traditional retail channels. More recently we have developed a
firsthand knowledge of the Internet as a dynamic marketing tool. Taken
together, these accomplishments put us in a unique position to unite
the strengths of traditional marketing with the exciting opportunities
before us."
    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
110 countries and territories under well-recognized brand names,
including Estee Lauder, Aramis, Clinique, Prescriptives, Origins,
MoAoC, La Mer, Bobbi Brown essentials, Tommy Hilfiger, jane, Donna
Karan, Aveda, Stila and Jo Malone. For the fiscal year ended June 30,
1999, The Estee Lauder Companies reported net sales of $4 billion and
net earnings of $272.9 million.

The forward-looking statements in this press release, including
those in quotations, involve risks and uncertainties. Factors that
could cause actual results to differ materially from those statements
are contained in the Company's filings with the SEC, including those
detailed in the "forward-looking statements" section of the Company's
report on Form 10-Q for the quarter ended December 31, 1999. They
include competition, changes in the retail industry, foreign currency
fluctuations and other risks related to doing business abroad, shifts
in consumer preferences as to where and how they shop for beauty
products, the Company's ability to develop products on which future
results may depend, changes in product mix to ones which are less
profitable and its ability to integrate acquired businesses and
realize value therefrom.

-0-
An electronic copy of this release can be found at The Estee
Lauder Companies' Website, www.elcompanies.com.

    --30--emb/ny*

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