The Estee Lauder Companies and Sean John Agree to Develop and Market New Fragrance Line

NEW YORK --May 21, 2004-- Hip Fashion House Founded by Entertainment Visionary Sean Combs Enters Multi-Year Partnership with Leading Fragrance and Cosmetics Company

The Estee Lauder Companies Inc. (NYSE:EL) today announced the signing of a worldwide licensing agreement with Sean John, the maker of contemporary clothing founded by Sean "P. Diddy" Combs. Under the exclusive, multi-year agreement, which is effective today, The Estee Lauder Companies will create and market a new line of fragrances under the Sean John name. Terms were not disclosed. Commenting on the deal, William P. Lauder, Chief Operating Officer of The Estee Lauder Companies, said, "This is an extraordinary opportunity to partner with one of the fastest-growing and most dynamic young fashion brands in the market, as well as with a man who has built a phenomenal reputation as a tastemaker in music, in fashion and in business. We look forward to collaborating with him and the Sean John team as they apply their vision and creativity to fragrance."

"People express themselves in many ways - through their music, through the way they dress, and also through the fragrance they choose, so deciding to make a fragrance was very natural for me," said Mr. Combs. "Creating a Sean John scent for the New America has many parallels to the way we design clothing or record great music. We look forward to exploring the possibilities with The Estee Lauder Companies. It's tremendously exciting to work with a group that is able to bring so much expertise, so much experience and so many resources to this project."

The development of the new fragrance line will be overseen by John Demsey, President of M-A-C, who will focus on developing Sean John while retaining his duties at M-A-C. One of the beauty industry's most respected senior executives, Mr. Demsey is known for adapting and setting trends, as well as his creativity and connection with the young consumer. "Sean Combs is the Great Gatsby of our time," said Mr. Demsey. "I look forward to spearheading this project and to working with Sean, a visionary whose extraordinary intuition makes people want to see, wear and listen to all that he creates." "When Sean Combs and I started the company, our long term vision was to establish a lifestyle brand," said Jeffrey Tweedy, Executive Vice President of Sean John. "Partnering with Estee Lauder is the next logical step in the development of a global lifestyle brand."

Sean John has quickly developed a reputation for well-made, sophisticated, fashion-forward clothing that reflects an urban sensibility and style. It has become one of the fastest-growing and most influential fashion houses in the market and is sold in doors including Federated and May Company retail stores, Carson-Pirie-Scott, Burdines and Belks. The line has received favorable reviews from magazine editors including Anna Wintour of Vogue, and has been nominated for the Council of Fashion Designers of America's Menswear Award three times, including in 2004, and its Perry Ellis Menswear Award two times. Acclaimed for his vision, creativity and street smarts, Mr. Combs is the phenomenally successful record producer, recording artist and actor, as well as the CEO and Founder of Bad Boy Worldwide Entertainment Group. He has shaped the careers of many popular hip-hop and rap artists while releasing four of his own albums, including the Grammy-Award winning "No Way Out". He has also appeared in the films "Made" and "Monster's Ball" and is currently starring on Broadway as Walter Lee Younger in the revival of Lorraine Hansberry's play "Raisin in the Sun". His many philanthropic activities focus on educational programs and initiatives for inner-city youth.

Sean John, a privately held company, was created by music icon and producer Sean "P. Diddy" Combs and made its fashion debut with a men's sportswear collection for the Spring 1999 season. With annual retail sales in the United States of over $350 million, the contemporary line of men's sportswear is sold in better department and specialty stores across the country as well as select retailers around the world. 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 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, Donna Karan, Aveda, Stila, Jo Malone, Bumble and bumble, kate spade beauty, Darphin, Michael Kors and Rodan & Fields.

The forward-looking statements in this press release, including those containing words like "will" and those in the quotes, involve risks and uncertainties. Factors that could cause actual results to differ materially from those forward-looking statements include the following:

(1) 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;

(2) the Company's ability to develop, produce and market new products on which future operating results may depend;

(3) 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;

(4) shifts in the preferences of consumers as to where and how they shop for the types of products and services the Company sells;

(5) 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;

(6) 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;

(7) 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;

(8) changes in global or local economic conditions that could affect consumer purchasing, the willingness of consumers to travel, the financial strength of the Company's customers, the cost and availability of capital, which the Company may need for new equipment, facilities or acquisitions, and the assumptions underlying the Company's critical accounting estimates;

(9) 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);

(10) 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 our other facilities;

(11) changes in product mix to products which are less profitable;

(12) the Company's ability to acquire or develop new information and distribution technologies, on a timely basis and within the Company's cost estimates;

(13) the Company's ability to capitalize on opportunities for improved efficiency, such as globalization, and to integrate acquired businesses and realize value therefrom;

(14) consequences attributable to the events that are currently taking place in the Middle East, including further attacks, retaliation and the threat of further attacks or retaliation.

CONTACT: The Estee Lauder Companies Inc., New York Media Relations: Sally Susman, 212-572-4430 or Nathalie Moar, 212-965-6331 or Investor Relations: Dennis D'Andrea, 212-572-4384 or Sean John Paul Witt, 212-730-0096 ext. 1134 KEYWORD: