William P. Lauder Steps Down as Executive Chairman as the Company’s Executive Restructuring Continues
Estée Lauder has appointed Stéphane de La Faverie as its new chief executive officer and president, a strategic shift that will also see the Lauder family step back from daily management of the iconic beauty brand. De La Faverie, a long-time senior executive, will take on his new role starting January 1, succeeding Fabrizio Freda, who is retiring after 16 years at the helm. The leadership change includes William P. Lauder, the grandson of founder Estée Lauder, stepping down from his role as executive chairman on November 8 to focus on his duties as chairman of the board. This transition marks the first time since the company’s founding that no Lauder family member will be involved in daily operations.
“This decision comes as the Lauder family evolves their long-standing day-to-day management of the company and reflects a desire to focus more on the overall strategic direction of Estée Lauder,” William Lauder noted in a statement. In an internal memo to staff, he and Freda reaffirmed the family’s commitment to the company, emphasizing their intent to remain influential stockholders to uphold their values and long-term vision.
The transition arrives at a crucial time as Estée Lauder grapples with declining profits and ongoing challenges in the Chinese market, where sales have underperformed relative to competitors like L’Oréal. The company recently projected lower earnings and sales for the upcoming fiscal year, impacted by sluggish demand in Asia and a market capitalization drop of nearly 40% this year to around $32 billion.
De La Faverie joined Estée Lauder in 2011 and, as executive group president, has overseen prominent brands, including Estée Lauder, The Ordinary, and Le Labo. He has been integral to the company’s Profit Recovery and Growth Plan, which has focused on streamlining operations, brand investment, and workforce adjustments to manage margins amid challenging conditions. De La Faverie commented on his appointment, stating,
As we work together to return to our preeminent position as the leader in global prestige beauty, we will draw on our family heritage, extraordinary brands, exceptional talent, consumer-centric approach, and creativity.”
Retail industry analysts and insiders expressed mixed reactions. While De La Faverie’s experience and track record with Estée Lauder are seen positively, some had hoped for an external CEO who might bring a fresh perspective to accelerate the turnaround. However, the board, led by presiding director Charlene Barshefsky, endorsed de La Faverie for his blend of “strategic vision, global industry knowledge, and experience,” adding that his appointment is expected to address Estée Lauder’s challenges and “revitalize growth.”
As Estée Lauder charts a new course, the company’s next steps will focus on product innovation, reaching a younger audience, and reinforcing its brand message to regain momentum in the competitive global beauty market.