Estée Lauder appoints new CEO, 2 third-generation heirs also resign, marking the first time in 75 years without family members involved in management

On October 30, Estée Lauder announced on its official website that the board of directors has appointed Stéphane de La Faverie as its new President, Chief Executive Officer, and board member, effective January 1, 2025. Stéphane de La Faverie will succeed Fabrizio Freda, who announced his intention to retire earlier this year after more than 16 years with the company. Fabrizio Freda will support de La Faverie in the coming months to ensure a seamless transition. As President and CEO, Stéphane de La Faverie will report directly to the company's board of directors. At the same time, the company also announced that William Lauder, the third-generation heir of the Lauder family, will resign from his position as Executive Chairman and will retain a board seat after the company's upcoming annual shareholder meeting. Jane Lauder, also a third-generation heir, announced on Sunday that she will resign from her company position. This marks the first time in the 75-year history of Estée Lauder that no family members will be involved in day-to-day management. With over 25 years of beauty experience, Stéphane de La Faverie joined the company in 2011 and currently serves as Executive Group President, responsible for managing many brands within the company's strong product portfolio, from billion-dollar brands like Estée Lauder to the expansion and development of brands such as Jo Malone London, the Normal, and Le Labo. The announcement mentioned that Stéphane de La Faverie is a creative, dynamic, and focused leader who is uncompromisingly dedicated to brand excellence and innovation across categories, regions, and channels, as well as driving profitability through discipline, speed, and efficiency. He has played a particularly important role in strengthening the company's fragrance portfolio at critical moments in the category, adeptly navigating industry changes and evolving consumer behaviors. Additionally, Stéphane de La Faverie has been instrumental in leading the implementation of the company's profit recovery and growth plan to help restore stronger and more sustainable profitability. Regarding this appointment, Charlene Barshefsky, Chair of the Estée Lauder Companies Board of Directors, stated that Stéphane de La Faverie is the ideal transformational leader needed to drive the company in addressing current challenges and entering the next chapter of growth. In 2023, to offset the impact of the beauty business in China on Estée Lauder's performance for fiscal year 2025, Estée Lauder Companies began executing the Profit Recovery and Growth Plan (PRGP), aimed at restoring sustainable, long-term organic sales growth and rebuilding the foundation of operational profitability. At that time, Jane Lauder was entrusted with significant responsibilities and was appointed alongside Stéphane de La Faverie as "Co-Executive Leaders" of the PRGP This move has also been widely interpreted by the outside world as the ultimate test for internal candidates Jane Lauder and Stéphane de La Faverie. However, some industry insiders believe that Stéphane de La Faverie's experience in localized operations and market insights in the Chinese market is one of the reasons he is favored by the group. If he becomes CEO, it may bring certain strategic advantages for Estée Lauder's recovery in the Chinese market. Although Jane Lauder has rich experience in digital marketing and gender equality, she lacks direct management experience in the Chinese market. In public reports, she has almost never set foot in China, which is clearly a disadvantage that cannot be ignored for Estée Lauder Group at this time. In September 2022, Estée Lauder Group divided its brand portfolio into two major brand clusters, led by Group Executive President Jane Hertzmark Hudis and Stéphane de La Faverie, who has been promoted to Group Executive President. Both report directly to Fabrizio Freda. The brand cluster led by Stéphane de La Faverie includes Estée Lauder, AERIN Beauty, Jo Malone London, Le Labo, KILIAN PARIS, Editions de Parfums FREDERIC MALLE, DARPHIN, LAB SERIES, and Deciem. At that time, the "scent market" in China was still in its infancy, but Stéphane de La Faverie saw significant market potential in China. Over the past year, he visited Shanghai four times, and the thriving business environment excited him greatly. Based on this, several perfume brands under Estée Lauder Group have been making continuous efforts in China. For example, to connect with Chinese consumers, Le Labo not only opened independent stores in Shanghai to redefine experiential shopping but also launched a Shanghai city limited edition perfume "Myrrh55." The results were immediate. In fiscal year 2024, Estée Lauder Group faced a decline: skincare sales fell by 3%, makeup decreased by 1%, and hair care dropped by 4%, while the perfume category remained strong, with sales increasing by 2% year-on-year. This was mainly driven by mid-single-digit growth of high-end perfume brands, with Le Labo recording strong double-digit growth in net sales, nearly doubling in the Asia-Pacific region. It is evident that the fragrance business has become a growth engine for Estée Lauder Group, and Stéphane de La Faverie has played a significant role in this. In an internal memo announcing her departure, Jane Lauder stated, "The company is undertaking necessary and fundamental changes, and I have thought about how to most effectively help the company regain its rightful position as a global leader in premium beauty." According to reports, Jane Lauder will serve as a consultant for the profit recovery and growth plan of Estee Lauder before the end of the company's fiscal year 2025 (ending June 2025). "This change will allow me to have the greatest impact on the future of the Estee Lauder Companies," she admitted, "In this position, I intend to focus on the company's strategic priorities, growth profile, and necessary transformational changes."