Elizabeth Arden

The Founder. Florence Nightingale Graham was born on December 31, 1878 in Woodbridge, Toronto, Canada to William and Susan Graham of Scotland. She was fourth of five children and her mother chose the powerful name for her. She had three sisters – Lillian, Christine and Gladys, and a brother, William. Her mother died of tuberculosis when Florence was only 6.

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Florence or Flo loved and took care of the family’s horses. Her father was a grocer and joining him in visiting the market unwittingly indoctrinated her into sales. When it was time to choose a career and she was not sure what to pursue, she first entered nursing school because of her name. She soon discovered that she was not for the sick, but for people who were healthy, young and beautiful. While in school, she met a biochemist who worked on a cream to cure skin blemishes. This caught her interest and got her into thinking that if a blemish cream could be used for skin cure, it could also be used as a cosmetic by women with less than perfect skin. Driven by the idea, she experimented to produce her own cream, using different natural sources, in their own kitchen and which she could sell through the mail. Her father, however, stopped the experiments and told her to find a regular job, instead.

She initially took odd jobs in Toronto, which could not hold her, until she announced that she was moving to New York where her brother William lived. In New York, she first worked for ER Squibb and Sons, where she gained knowledge on substances appropriate for skin care. Flo was in the right place and at the right time: there was growing interest in skin care in New York in those early 1900s. Beauty culturists and parlors lined the streets and offered to make women look younger and more beautiful. Flo was hired by one of the beauty culturists, Eleanor Adair, as a facial treatment masseuse. In the course of her work, Flo found that the products used by Adair were not very effective and thought that she could develop the effective ones. She continued the experiments begun at their home kitchen in the search of a fabled “beauty cream” from common substances, mostly medicines, salves and herbs.

In 1909, she met Elizabeth Hubbard who had the skin products but not the “magic hands” to apply these and these hands belonged to Flo. They formed a partnership and planned to open a salon with their excellent combination of gifts. But being both headstrong, the two women had a clash and their business never got started. Elizabeth Hubbard moved to another place, while Flo decided to open her own salon.

Flo also decided to change her name from the sullen-sounding name of the famous nurse, Florence Nightingale, who had just died then to “Elizabeth,” the name already painted on the window of her salon and to it, add “Arden,” a name she found among Alfred Tennyson’s poems.

II. Company History. Capitalizing on the knowledge of basic formulas from Adair ad Hubbard, Flo began the foundation of her cosmetics business by borrowing $6,000 from her brother William. She introduced her Venetian cream line and so named it as to confuse customers with Hubbard’s better known Grecian brand. She also added more fragrance to improve the scent of her products.

Flo decorated her parlor in a way that attracted customers – pink walls, choice French antiques, an Oriental carpet, a Venetian chandelier and a red front door with a brass nameplate with her name on it. She also offered manicure services on the sides as support to her business, named Fifth Avenue Beauty Salon, through which she marketed her products. Flo changed “parlor,” which was too homey-sounding, to “salon,” which connoted class and elegance. She started business with two treatment assistants and a receptionist and rented out the back parlor of her salon to the Ogilvie sisters who provided hair and scalp treatment, which enhanced her own product line.

Her business formula worked. In just six months, she was able to repay her loan to her brother and used the rest of the profit to improve on her salon and product formulas. She creatively built on the comment made by Vogue magazine in 1912 that “a discreet application of a little paint would enhance a lady’s appearance” and introduced rouges and tinted powders. The beauty culturists of the time used cheek rouges that were very brightly shaded and made the wearer look too gaudy and ridiculous. Here was where Flo’s exceptional talent in mixing colors came in. By constant practice and experiment on her employers, she developed a way of using rouge to create a natural look.

Her business so prospered that she opened a branch in Washington DC in 1914. Operating two salons in these major cities prompted her to update her knowledge on cosmetics and to go to France in order to do so. The First World War broke out but Flo kept her mind on her purpose. In that “educational” visit to Paris, she found that French women were ahead of American women in the cosmetics business and observed that French women wore eye shadow, rouges, lacquers and mascara only subtly.

III. Major Launchings. Back in New York, Flo acquired the services of a Fabian Swanson, a chemist, to create new creams and fragrances, based on her specifications. She wanted these products to have the texture of whipped cream instead of the hard and oily ingredients of those in the market of those times. She named the light, fluffy product “Venetian Cream Amoretta,” which felt so velvety smooth that it could be used as a skin softener and base for powder; a gentle toning lotion, a pore cream for blackheads, oil for wrinkles and a neck-and-bust firming cream. In no time, she had a full line of skin-care items and another full line of rouges and tinted face powders, which she offered her customers. Wearing colors on the face at the time was associated with loose morals and customers were hesitant to try out Flo’s products. But they eventually came to realize that a new trend had begun with Flo’s creative and exciting color cosmetics. Flo was a clear and huge success in her career.

Intertwined with her amazing career were her marriages. The first was to Tommy Lewis, the banker who gave her first loan. Their romance was interrupted by World War I, which Tommy joined. When the War ended, he returned and took over Flo’s company books. They toured England and considered setting up a salon there. Flo’s youngest sister Gladys joined them to help with the expansion. While Flo and Tommy negotiated with the British, Gladys worked on Raul Mayer, the head of the French store Galeria Lafayette, for the setting up of a stall for Flo’s or Arden products and succeeded. Gladys also convinced Flo to open a factory in France and to hire a chemist to produce her products and create new ones that were adapted to the taste of European women.

In 1920, Tommy applied a selective marketing technique for Flo’s products, whereby these would be made available only to New York stores on the prestigious Fifth Avenue and in other select and major cities. The couple targeted wealthy women who equated exclusivity with price and quality and, by focusing the top 3% of the female population in America, Flo and Tommy made more than $2 million in domestic wholesale sales in 1925. Flo boasted that only three American names were known in every corner of the world – Singer Sewing Machine, Coca-Cola and Elizabeth Arden. But the trade-off for her gigantic prosperity was a failed marriage with Tommy, which ended in a divorce in 1934. Flo also lost her good friend and neighbor Bessie Marbury. Her second husband was Prince Michael Evlonoff, whom she married in 1942 but divorced in 1944.

In 1934, Flo opened the Maine Chance Beauty Resort, a luxurious health spa, and launched her first fragrance, Blue Grass Perfume, in 1935. Blue Grass was a memorably sweet floral fragrance that combined the scents of carnation, jasmine, narcissus, sandalwood, musk, lavender, neroli and bergamot. Flo or Elizabeth Arden also became the first cosmetics company to advertise its products in movie houses. An original and reactive trendsetter, she was sensitive to the changing needs of American women in society, especially those at work. Even during World War II, she invented make-up styles and dressing for work, such as a red lipstick, called Montezuma Red, for women in the armed forces to match the red trim on their uniforms.

IV, Impact on Beauty Culture and Industry. Competition in the cosmetics industry in the early 1900s was quite stiff. Arden’s chief rival was Helena Rubinstein and they were keenly aware and critical of each other’s every move. They waged advertising wars and swapping each other’s staff. During their marriage, Tommy never held stock in Flo’s company and this led him to move to work under Helena. Flo retaliated by acquiring Harry Johnson and 11 other employees who then worked for Helena. When Helena opened a salon in New York, Arden opened a counterpart elsewhere. Parallelisms appeared to occur between them in that they both entered the men’s skin care industry at roughly the same time. They also both married exiled princes after their first marriages ended in divorce.

Flo or Arden also lost half a million dollars in sales in the first two years since her divorce with Tommy, but being inherently innovative, she managed the crisis, recovered and proceeded to lead the industry. Records bear these out. While many businesses flopped during the Great Depression, Elizabeth Arden not only stayed and spent. It also bought an office building and a penthouse in New York during the stock market crash of 1929 and opened several other salons in the 30s.

Elizabeth Arden demonstrated an unwavering commitment to quality and excellence in her products and adhered to high standards from ingredients to packaging. She owned more than 100 salons in North America and Europe and manufactured approximately 300 cosmetics and fragrances. Flo or Elizabeth Arden was a hard-driven businesswoman whose business grossed around $60 million per year at the time of her death in October 1966. Her business empire consisted of 17 different corporations and 40 salons throughout the world. With these feats, it can be contended that Elizabeth Arden invented the American beauty industry.

V. Major Product Lines. These are Blue Grass Perfume; Green Tea Perfume created in 1999, Red Door Perfume, Splendor Perfume, Sunflowers Perfume for Women in 1993, and True Love Perfume for Women in 1994.

Green Tea Perfume was a homeopathic fragrance, made up of caraway, citrus, peppermint, musk, and oak moss. Red Door Perfume was a blend of red rose, violet, jasmine, lily of the valley, orchid and a touch of honey. Splendor Perform was a floral blend of water lily, magnolia and white musk. A mix of melon, cyclamen, peach, musk, bergamot, jasmine, rose and sandalwood produced Sunflowers Perfume. And True Love Perfume for Women was made from musk, lotus, sandalwood, vetiver, iris, narcissus and jasmine. These and Arden’s other scents are marketed under many brand names, including Elizabeth Arden, Red Door, Arden Beauty, White Shoulders and Elizabeth Taylor’s White Diamonds and Passion. It also sells colognes and skin care products.

Elizabeth Arden has a 8.3% sales growth yearly, grossed $814 million in sales in 2004 and has a net income growth rate of 89%. It has 2,150 employees. Its top competitors are Coty, Inc., Estee Lauder and Revlon.

VI. Current Market Activities. A study conducted on Elizabeth Arden by Lubin Lawrence, Inc. reported that women were turned off by its dictates, perceived that Arden’s concept of beauty was unreal and unattainable, the beauty industry was irrelevant to their real lives and that they had little relationship with brands.

Arden president and chief executive Peter England commented that, while the industry focused largely on glamour, people’s view of beauty changes. He admitted to Arden’s struggling against giant competitor Estee Lauder Companies and that, with a $50-million corporate budget, Arden would redefine its image through an unconventional campaign. That campaign would tell women that beauty comes from within and not from a jar.

England said that this would be Arden’s message in introducing a host of products that would help women find inner beauty, such as through colorful lipsticks, new fragrances and special skin care products. All Arden products would come under the theme, “Embrace Yourself.” A beauty industry trade publication editor, Allan Mottus of the Informationalist, commented that Arden was attempting a dialogue with the consumer in creating subliminal trust after saturating the market with one product after another.

Last April, Arden announced that the J. Walter Thompson of New York would do the promotion and advertising for the campaign, which began last August. The campaign includes blind teasers in bus shelters and billboards in New York, Los Angeles and Chicago. Single words with “ea” in Arden’s signature red would be flashed, followed by sentences that would complete these single words, like “I am a fearless girl… I am the leader in my free world” and Arden would be the messenger of these messages.

National print ads last September carried black-and-white un-retouched photos of various ethnic groups and ages, rather than the traditional highly stylized glamour shots of the industry. The creative minds at Arden said the campaign would involve real women, who would like to feel and look their best at any age. It would target women’s sense of insecurity about looks and age, particularly in response to recent findings that women today would want not only to cover or mask their imperfections, but also make skin care and make-up bring out their natural best.

The campaign targets women aged 25 to 55. The NPD Research of Port Washington, New York said that Arden grew only at 3% last year and that Estee Lauder widened its share of the market in recent years, particularly with its Clinique and other prestige brands, which accounted for 44.9% of the market.

Arden would introduce the Millennium Energist Revitalizing Emulsion, using soy technology in treating aging skin and Lip Hooray lipstick to fight bad breath. Over and above, Arden would continue to tap into the heritage of the Arden proven lines to help revitalize its business through image projection and technical advancements.


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