The Estee Lauder Companies Inc. (NYSE:EL) announced today that it has acquired Michael Kors Fragrances, the fragrance and beauty license previously held by American Designer Fragrances, a division of LVMH.

Terms of the deal were not disclosed. Michael Kors Fragrances will become part of The Estee Lauder Companies’ Aramis and Designer Fragrances Division, which is led by Patrick Bousquet-Chavanne, Group President, and John Karp, President. The Michael Kors fragrance business was launched in 2000 with his signature FiFi award-winning women’s fragrance, MICHAEL. MICHAEL for Men was launched in 2001 and received awards from the Fragrance Foundation and Cosmetic Executive Women. A new women’s fragrance, KORS Michael Kors, was launched in February 2003. All fragrances, as well as ancillary bath and body products, are currently sold in department stores, specialty stores, at freestanding Michael Kors boutiques and over the Internet.

“We are very pleased about this new alliance with Michael Kors L.L.C.,” said Patrick Bousquet-Chavanne. “We believe that the brand has significant growth potential, and we look forward to a long and productive relationship with Michael and his partners, Lawrence Stroll and Silas Chou, all of whom have tremendous track records. I know we can count on their energy and talent to make this collaboration a great success. The team at American Designer Fragrances has done a very good job developing the Michael Kors concept, and the Michael Kors fragrances have been well-received in the marketplace.” Michael Kors stated, “I am so thrilled to become part of The Estee Lauder Companies. They are truly the bell-weather in the beauty business… it’s what everyone else aspires to become. I know that with their expertise, my fragrance business is in the best of hands.”

“Silas and I approached The Estee Lauder Companies about partnering with us to take Michael’s fragrance business to the next level, and together we are mapping out a long-term strategy to strengthen the brand and remain true to Michael’s vision,” said Lawrence Stroll, Co-Chairman of Michael Kors. “We were the Company’s first designer licensor with Tommy Hilfiger, and we look forward to new opportunities ahead with the Michael Kors business.”

“Michael is a leader in the fashion world, and the Michael Kors fragrances further strengthen our position in the designer fragrance arena,” said John Karp. “This will be a powerful complement to our other designer licenses - Donna Karan, Tommy Hilfiger and Kate Spade - each of which represents a unique and highly successful business.”

Michael Kors is one of the leading American designers for luxury sportswear. His range of products through his Collection and KORS Michael Kors labels includes women’s and men’s ready to wear; women’s shoes, handbags and eyewear, as well as a full line of fragrance and beauty products for both men and women. His products are available at leading department and specialty stores throughout the world, as well as freestanding retail locations in New York and Tokyo.

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, jane, Donna Karan, Aveda, Stila, Jo Malone, Bumble and bumble, kate spade beauty and Darphin.

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 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, including