Hear that thud? It’s the other shoe, dropping. One day after a barrage of reports hit the airwaves, Estée Lauder Companies (ELC) confirmed that it has handed Stéphane de la Faverie the top job. In ascending from Executive Group President to President and CEO, de La Faverie will replace the outgoing – and increasingly beleaguered – Fabrizio Freda, and effectively leap-frog over granddaughter and second-largest ELC family stakeholder Jane Lauder. It’s a story of the Estée Lauder CEO succession drama.
De la Faverie is staring down a bloated brand portfolio in serious need of pruning. For every Deciem, there’s a GLAMGLOW. And while the Tom Ford Beauty brand – which sprang to life at ELC – remains a stunningly crafted bright spot for the corporation, do they seriously have any idea how to run the fashion side? After plunking down a cool $2.8B, let’s hope so.
Come January, de la Faverie will segue from managing a sizeable slate of brands (Estée Lauder, AERIN, Jo Malone London and the edgier Deciem, Le Labo and Kilian Paris) to steering a massive, nearly $16B, publicly traded portfolio that includes all of the aforementioned brands plus the baked in-house Clinique and Origins plus an unwieldy assortment of acquisitions ranging from powerhouses MAC and Bobbi Brown to the once-buzzy but fading Smashbox and Too Faced. Oh, and the Tom Ford fashion business, too, while he’s at it.
Working Straight Up the Ranks
De la Faverie, who logged nine years at L’Oréal – most recently as General Manager of Giorgio Armani Beauty USA — before landing at Lauder in 2011 as Senior Vice President and Global Brand President overseeing Aramis and designer fragrances, has been on a steady upward trajectory at the beauty behemoth.
Taken under Freda’s wing, de la Faverie moved up the ranks. In 2016, he was tasked with reviving the past-its-prime Estée Lauder brand, a position he took to with gusto. Embracing digital-first and data-led marketing, de la Faverie achieved the seemingly impossible: widening the customer base to include even Gen Z.
Somewhat boldly, the official press release surrounding de la Faverie’s ascension to President and CEO also points out the success he had attracting Chinese customers to the Estée Lauder brand. Given how much Freda has been bashed for betting the farm on China, it’s a wonder the ELC in-house PR team would even go there.
Still, this is the honeymoon phase, and there’s no question that the tri-lingual de la Faverie is a man of the world. Routinely praised for his collaborative approach to problem-solving and his firm grasp on global markets, not to mention his Midas touch with the industry’s new favorite category – fragrance – de la Faverie was well-poised to emerge as the front-runner for one of the biggest, most coveted jobs in beauty.
A Top Family Contender Is Pushed Aside
For Jane Lauder, who has held numerous high-profile jobs at the family firm and reportedly owns a 6 percent/$1.7B stake, the appointment of Faverie to the CEO spot must truly sting. Just days before it was formally announced, Lauder, Chief Data Officer and Executive Vice President of Enterprise Marketing said she would step down but remain on the board.
The younger of Estée Lauder’s two billionaire granddaughters, Jane was – is – all business. While the unimpeachably glamorous Aerin carved out an artsier path at ELC, first as Creative Director of the flagship brand and later purveyor of all manner of chic lifestyle merch under her own name, Jane hopped straight into the trenches. She has served as Global Brand President for both Origins and Clinique and as recently as this past July, was named as a co-leader of ELC’s profit recovery plan, alongside de la Faverie.
At First Blush, The Emphasis on China Looked Brilliant
And about that profit recovery plan… While there are two main forces working firmly against the brands in the ELC portfolio, namely the near obliteration of department stores and the collapse of the Chinese consumer market, it’s the latter that Freda is most readily associated with.
In its initial stages, Freda’s bullish bet on China paid off in spades, helping to boost ELC stock to a record $300+ in 2021. That’s quite the leap from where it was sitting in 2009 at $20 per share when Freda joined ELC after a long run at P&G. More recently, it was hovering around $92 dollars in August, although there was a slight positive spike when it was announced de la Faverie would be stepping into the top job.
The Challenges Ahead for de la Faverie
Of course, there’s more to the equation than just department stores in decline and an anemic, post-Covid Asian market. Thanks to the oh-so-acquisitive Freda, de la Faverie is staring down a bloated brand portfolio in serious need of pruning. For every Deciem, there’s a GLAMGLOW. And while the Tom Ford Beauty brand – which sprang to life at ELC – remains a stunningly crafted bright spot for the corporation, do they seriously have any idea how to run the fashion side? After plunking down a cool $2.8B, let’s hope so.
But lensing out to the bigger picture, TikTok-besotted beauty consumers are getting less brand loyal by the day. With attention spans ground down to mere seconds, it’s harder and harder for massive machines like ELC to make a dent.
Can they do it? There’s certainly the manpower, although one piece of the current ELC profit recovery plan is to slash five percent of the workforce, or roughly 1300 jobs.
Still, there have been recent viral hits coming out of ELC, like the rediscovery of Clinique’s legendary Black Honey Almost Lipstick by young enthusiasts, which the brand has smartly spun off into an entire Black Honey franchise.
To really nail success in his new job, Stéphane de la Faverie will need to come up with a Black Honey equivalent in each and every one of his brands – and then do that over and over and over again.
