Estee Lauder to Possess Exclusive Worldwide Rights to Create and Market
                 Beauty Products Under Donna Karan Trademarks

    NEW YORK, Sept. 30 /PRNewswire/ -- The Estee Lauder Companies Inc.
(NYSE: EL) today announced the signing of an agreement with Donna Karan
International (NYSE: DK) under which Estee Lauder will obtain exclusive
worldwide rights to the Donna Karan trademarks for the manufacture, marketing,
distribution and sale of beauty and beauty-related products.  Licensed
products will include all fragrances and fragrance ancillaries, cosmetics,
skin care products and beauty related accessories.  Trademarks will include
Donna Karan New York(R) and DKNY(R).
    The transaction is subject to certain conditions such as Hart-Scott-Rodino
and is expected to be completed by the end of October.  Financial terms of the
agreement were not disclosed.
    Commenting on the agreement, Leonard A. Lauder, Chairman and Chief
Executive Officer, The Estee Lauder Companies Inc., said, "This agreement with
Donna Karan International is another step in our strategy of developing a
portfolio of powerful, complementary brands with consumer appeal in both the
U.S. and international markets.
    "Donna Karan is a well-recognized name known throughout the world for
quality, style and innovation.  This strong brand equity, combined with our
distribution, technology and marketing strength, will be a potent combination.
We welcome the opportunity of applying our management expertise to another
great brand and look forward to creating and marketing exciting products that
reflect Donna Karan's uniquely sophisticated style."
    The new venture will be managed as a separate business within the Estee
Lauder Companies by Robin Burns, who is also President and CEO, Estee Lauder
USA and Canada.  Under Ms. Burns' leadership, the Estee Lauder division has
strengthened its position as a market leader in the prestige makeup, skin care
and fragrance categories.  Before joining Estee Lauder, Ms. Burns was
President of Calvin Klein Cosmetics Corp., where she launched Eternity,
Eternity for Men, Obsession and Obsession for Men, four of that company's most
successful fragrances.
    Donna Karan, Chairman and Chief Designer, Donna Karan International, said,
"This strategic alliance will allow Donna Karan International to realize our
vision for the beauty business by providing the energy and resources to take
this business to its optimal level of success.  When we first launched the
beauty business, our vision was to serve a unique niche in the industry by
providing innovative and creative products that fulfilled our customers'
desires for a luxurious, sophisticated and sensual beauty system.  Now that
the business is entering the next stage in its development, we felt it was in
our best interest to strategically align with the best company in the beauty
industry, which will ensure that the business receives the power and support
to build our brands to the level and success we now know are achievable."
    Ms. Karan continued, "I've long admired Estee Lauder the company, and
especially the woman, who has been a role model for her passion and integrity
of product.  Like Mrs. Lauder, everything I stand for as a designer and a
businesswoman relates back to knowing my customers and giving them products
that make a difference in their lives.  At the same time, I'm looking forward
to the opportunity to work in partnership with Robin Burns, whom I have long
admired."
    "The Donna Karan name has tremendous impact in the worldwide cosmetics and
fragrance marketplace and I look forward to working with Donna to realize its
potential fully," said Ms. Burns.  "Donna's creativity, passion and deep
understanding of her consumers will be invaluable resources that will help
assure the success of this venture."
    The Donna Karan Beauty Company, a division of The Donna Karan Company, was
created in 1992.  The business currently includes women's and men's fragrance,
bath and body, and treatment products under the Donna Karan New York and
DKMen(R) brands which are distributed to department stores and specialty
stores around the world.
    The Estee Lauder Companies Inc. is one of the world's leading
manufacturers and marketers of quality skin care, makeup and fragrance
products.  Its brands are sold in more than 100 markets under well-recognized
names including Estee Lauder, Clinique, Aramis, Prescriptives, Origins, MAC,
Bobbi Brown essentials and Tommy Hilfiger.  For the fiscal year ended June 30,
1997, the Estee Lauder Companies had annual revenues of $3.4 billion and net
earnings of $198 million.

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