Estee Lauder appoints company insider as new CEO to tackle demand headwinds

Investing.com -- Estee Lauder (NYSE:EL ) appointed insider Stephane de La Faverie as its new CEO on Wednesday, in a bid to revitalize its business amid weaker demand for cosmetics and premium fragrances as consumers become more selective in their spending.

Currently Estee Lauder’s executive group president, De La Faverie is responsible for overseeing luxury fragrance brands including Jo Malone London, Frederic Malle, Le Labo, and Kilian Paris.

He joined the company in 2011 after a tenure at L’Oreal and will officially assume the CEO role on January 1, 2025, succeeding Fabrizio Freda, who announced his retirement in August. Estee Lauder has said Freda will stay on as an advisor through fiscal year 2026.

Freda, who took over as CEO in 2009, expanded Estee Lauder’s skincare lineup with acquisitions of brands like Dr. Jart and Deciem, the parent company of The Ordinary.

"Following a comprehensive CEO succession planning process, and a thorough review of external and internal candidates, Stephane was the clear choice of the board," stated Charlene Barshefsky, presiding board director.

Moreover, William Lauder, grandson of Estee Lauder’s founders and former CEO, will step down as executive chairman but remain chair of the board.

“Stéphane’s deep-rooted industry and operational expertise, and his collaborative and dynamic approach, make him the ideal CEO to move us forward with speed, and urgency,” Lauder said in a statement.

De La Faverie will focus on boosting sales, particularly in China, as demand for “affordable luxuries” like lipsticks and perfumes—a traditionally resilient market segment—has softened.

Estee Lauder will release its quarterly earnings on Thursday, following a previous forecast that anticipated full-year profit and sales below expectations, largely due to weakness in the Chinese market.

The company’s stock has plummeted nearly 40% this year.

Source: Investing.com