In collaboration with High Life: Living the Good Life, VOICE OF ASIA is proud to present timeless articles from the archives, reproduced digitally for your reading pleasure. Originally published in High Life Volume 4 in 2015, we take a peek behind the curtain and see what makes the biggest family-owned businesses tick.
Even in this day and age, family-owned companies still dominate much of the business world. After all, many founders – having shed sweat and tears to achieve success – are reluctant to hand their creations over to just about anyone. A family relationship gives them the assurance that their hard work will not be for nought. It assures them that their legacies will be respected and adhered to. In line with the theme of this issue, we take a look at how those who have made it to the very top have consolidated their legacy, by ensuring that the philosophies and values that have led them to success continues on through the bonds of blood.
Estée Lauder
Bringing the Best
Estée Lauder’s acquisitive ways do not diminish the vibe of kinship prevalent in this family-dominated beauty conglomerate founded in 1946 by its namesake. Indeed, it grows successfully by preserving the label, craftsmanship and unique points of beauty products from independent brands bought and brought under its marque. Four such names which recently came on board are RODIN olio lusso, Le Labo, Editions de Parfums Frédéric Malle and GLAMGLOW. They, like others before them, are enthused that the cosmetics giant embraces their entrepreneurial spirit and artisanal quality — characteristics heralded by Estée Lauder when it first started. Such selective brands provide the kind of product differentiation, client rapport and sophistication Estée Lauder needs to stay relevant while getting the international market penetration they could neither have achieved nor supported on their own. Translated into financial terms — a market capitalisation of over US$28 billion for the company.
Estée Lauder Companies Inc. has been publicly listed since 1995 but the Lauders remain majority stock holders and very much involved in many areas of the business. The late Estée’s eldest son, Leonard Lauder, holds the title of Chairman Emeritus while his son, William, sits as executive chairman. Granddaughter Jane is Clinique’s (another brand within the company) global brand president, while her sister, Aerin, apart from directing Estée Lauder’s style and image, also has her own cosmetic, perfume, fashion and furniture line named AERIN within the company.
Versace
Legacy of Glamour
The ups and downs of family fashion empire, Versace, read like the script of a drama. (In fact, a movie has been made — House of Versace.) After founder Gianni Versace’s untimely demise in 1997, the burden to continue the label’s preeminence fell onto sister Donatella’s shoulders when she took over the creative reins. Hitherto Gianni’s indulgent muse and adviser, she had had to come out from under her brother’s shadow by projecting a fresher image and not merely copy the original. Today’s Versace remains glamourous and sexy as ever, but the style has now a sobriety in line with new realities in contrast to its former flamboyant heydays.
Transitional problems are mostly water under the bridge even as Versace rejuvenates and seeks new horizons. Much has evolved, with the company expanding into accessories, interior designing and setting up Palazzo Versace hotels. Selling a 20% stake to U.S. private equity firm Blackstone last year, as well as plans for an initial public offering in a few years’ time, which will provide the needed liquidity for further diversifications and further Versace’s ambitions in emerging markets. The family controlled brand has eldest brother, Santo, as company president while Donatella’s daughter, Allegra, owns 50% of the business, as bequeathed to her by Gianni.
Salvatore Ferragamo
Thoroughly Italian
The heirs and assigns of the Ferragamo business dynasty are a “tribe” kindred by blood and shoes. A Milan Stock Exchange listing notwithstanding, the majority of the company is still owned by dozens of descendants of Salvatore Ferragamo — the Neapolitan cordwainer who found fame in 1920s Hollywood. Re-establishing himself in Florence, Italy, in 1927, he became “Shoemaker to the Stars”, and was successful enough in due course to purchase the landmark Palazzo Spini Feroni, which remains as headquarters till today. Those flourishing days as a one-man company (with several hundred artisans) attending to celebrities and royalty have since metamorphosised, helmed by the second generation of Ferragamos, into a global business.
With Salvatore’s premature death in 1960, widow Wanda, who is currently honorary chairwoman, and their six children ran the show. Daughter Fiamma (deceased since 1998) continued design and production, while Giovanna and Fulvia took over women’s prêt-à-porter and accessories respectively. Eldest son, Ferruccio, assisted his mother whence he naturally assumed his current chairmanship of the company. Fifth son, Leonardo, learnt the ropes making his way through production, accessories and clothing before finally becoming the marketing man for Europe and Asia while Massimo, the youngest son, seems to have brought Ferragamo full circle by heading its American operations.
S.C. Johnson
A Family Company
Unsurprisingly, Glade, Pledge, Off! and Raid are among ubiquitous household brands recognised for generations because the privately held American company which produces them has been around since 1886. S.C. Johnson & Son, Inc. had humble beginnings selling parquet flooring and Johnson’s Prepared Wax for its care. In time, “Johnson Wax” stuck as its colloquial name. Over a century later, and the company has turned into a veritable consumer products giant acquiring Windex (Drackett Company), Ziplock (DowBrands) and Baygon (Bayer AG) along the way, and establishing its presence in over 110 countries.
Aptly taglined, “A Family Company”, five generations of Johnsons have watched over and guided the company. When founder Samuel Curtis Johnson died, son Herbert Fisk Johnson Sr succeeded him as president in 1919. Nine years later, Herbert Sr passed on and son Herbert Fisk Johnson Jr took over. 1966 saw Samuel Curtis Johnson Jr assuming the presidency from his father Herbert Jr. By the end of the 20th century, the company had grown extremely large and family succession was no longer a straightforward matter. However, Samuel Jr ensured control transferred over to the fifth generation. As a result, his son, Herbert Fisk Johnson III, became chairman of the board in 2000 while Samuel Jr. sat as Chairman Emeritus before passing away in 2004.
L’oréal
Because They’re Worth It
Founded in 1909, the L’Oréal Group is the world’s largest cosmetics and beauty company. Billions of dollars spent on advertising and promotions extend the retail reach of L’Oréal products. Its mass marketing modus operandi (print and TV ads), which has served well since 1925, however, is giving way in these digital times to focused, interactive and content-rich platforms like YouTube and mobile apps, for example. L’Oréal is thus, despite its size, re-defining itself into a more personal and intriguing brand and company to avoid becoming a complacent behemoth. Along with digital initiatives, other “transformations” like strategic acquisitions, corporate social responsibility projects, as well as simplification, have resulted in a record 17.3% profitability for the group in 2014. This success confirms the “new L’Oréal of the 21st century” to be universal, digital and sustainable in its relentless pursuit of “Beauty for All”.
L’Oréal heiress, 92-year old Liliane Bettencourt, daughter of the founder Eugène Schueller, stepped down as a board director in 2012 due to ailing health. Grandson Jean-Victor Meyers took her place, and together with his parents, Françoise Bettencourt-Meyers (mother) and Jean- Pierre Meyers (father), hold three seats on the board. The Bettencourt family has a 33.2% stake in the company.
