周二，雅诗兰黛（Estée Lauder）公布了2025财年第二季度财报。报告期内，雅诗兰黛集团净销售额为40.04亿美元，下滑6%；净利润亏损5.8亿美元，去年同期净利润则为5.74亿美元。雅诗兰黛集团还表示将裁减5800至7000个工作岗位，这是雅诗兰黛集团近10年来最大规模的裁员计划。
早在10月，雅诗兰黛（旗下拥有魅可（MAC）、艾凡达（Aveda）、Le Labo 和倩碧（Clinique）等全球知名奢侈品牌）发布了一份极为惨淡的财报，为了保留现金，该公司将股息削减了近一半，此举令股东们惊愕不已。该公司不仅未能粉饰这一糟糕局面，还撤回了财务预期，这对投资者而言无疑是一记沉重的打击。就在11月的那一天，其股价暴跌21%，创下这家拥 79年历史的公司有史以来最大的单日跌幅。
雅诗兰黛在过去两年中一再下调预期，这一事实只会让人觉得公司高管对业务状况毫无头绪。事实上，管理层也暗示，对于由长期在华销售下滑导致的利润锐减等问题何时能够终结，他们也毫无把握。Stansberry Research公司的著名投资人惠特尼·蒂尔森（Whitney Tilson）在随后发表的一篇文章中写道：”雅诗兰黛曾是一家卓越的公司……但鉴于利润大幅下滑，我不确定它是否仍然是。”蒂尔森补充说，诚然，雅诗兰黛拥有强大的品牌，但他抨击该公司“管理极为不善”。
这些数字无疑为蒂尔森等批评者的观点提供了支撑。事实上，这家标志性的美容公司在三年多的时间里经历了全面崩溃，收入和利润都受到了重创。投资者也深受其害：自2022年1月创下374.20美元的历史高点以来，股价已下跌了78%。
按市值计算，过去三年的股价暴跌已导致该公司市值蒸发逾1000亿美元。这对创始人劳德家族来说尤其是一记重拳，该家族持有公司近35%的流通股（以及84%的投票权）。该公司拒绝置评。
在截至6月30日的2024财年，雅诗兰黛的收入为156亿美元，比2022年的峰值下降了12%。销售额呈现出下滑趋势，而利润更是遭遇了断崖式的下跌。该财年的净利润为4.09亿美元，较上年同期下降60%。在本财年第一季度，也就是10月灾难性的那一天，公司净亏损1.56亿美元，这加剧了人们对雅诗兰黛未来业绩进一步恶化的担忧。
不管是否存在“管理极为不善”的问题，该公司显然未能适应快速变化的奢侈品市场。更重要的是，雅诗兰黛如今的困境在于，它未能适时调整三至五年前看似可行的战略。在时任首席执行官傅懿德（Fabrizio Freda）的领导下，该公司对中国奢侈品市场的巨大押注助力雅诗兰黛在2010年代实现飞速发展，但如今却成为拖累其业绩的主要因素。与此同时，在婴儿潮一代和X世代中大受欢迎的雅诗兰黛护肤品和化妆品品牌却未能赢得40岁以下消费者的青睐。
正如《华尔街日报》报道的那样，在雅诗兰黛深陷困境之际，劳德家族内部出现了两大派系的分歧，他们在如何遏制公司颓势的问题上各持己见。公司首席数字官简·劳德（Jane Lauder）希望雅诗兰黛采取更大胆的举措来吸引更年轻的消费者，而她的堂兄威廉·劳德（William Lauder，前执行主席、前首席执行官，也是公司创始人的孙子）则对傅懿德的战略持赞成态度。
过去三个月里，简·劳德、威廉·劳德和傅懿德都已离开公司高层，因此本周的投资者电话会议将由雅诗兰黛内部资深人士斯特凡·德·拉·法维里（Stéphane de La Faverie）首次主持。这位新任首席执行官将有机会向投资者介绍公司在最终重回正轨方面的最新进展或不足。
德·拉·法维里将肩负重任，终结公司在华销售颓势，提升全球供应链效率，通过更精准有效地利用TikTok等平台来吸引年轻消费者，并重振日益与年长消费者相关联的核心品牌。与此同时，在推进这一系列举措的过程中，他还必须满足于仍然对公司拥有绝对控制权的创始家族的期望——他们绝不会接受雅诗兰黛在奢侈品竞争中屈居人后。
陨落前的伟大十年
在傅懿德的领导下，雅诗兰黛多年来一直是美容业巨头。傅懿德是宝洁公司（Procter & Gamble）前高管，曾在其零食业务部门担任领导职务。他于2008年3月加入雅诗兰黛，担任总裁兼首席运营官。16个月后，他晋升为首席执行官，成为有史以来首位劳德家族成员之外担任这一职务的人。
投资者和分析人士认为，出生于意大利并在当地接受教育的傅懿德将宝洁公司灌输的财务和专业纪律带到了这家美容公司，并使其技术实现现代化。傅懿德在处理家族事务时，还得到了前任首席执行官威廉·劳德的支持。
从2009年傅懿德上任到2022年创下历史新高，雅诗兰黛的股价上涨了643%。在他任职的最初几年里，傅懿德将公司的业务重点聚焦于高端和全奢华产品上。公司的产品组合如今包括24个品牌。该公司的收入从2010年的78亿美元增加了一倍多，到2022年达到了177亿美元的峰值。
在傅懿德时代，雅诗兰黛还进行了大量收购，旨在赢得年轻消费者的青睐。虽然雅诗兰黛同名品牌及其他奢侈护肤产品如海蓝之谜（La Mer）销量巨大，但它们确实迎合了年龄较大的客户群。傅懿德收购的品牌包括香水品牌 Le Labo、化妆品品牌 Two Faced 以及加拿大的护肤品牌Decium和韩国的Dr. Jart。
更重要的是，傅懿德很早就对中国奢侈品市场下了重注。这一押注让雅诗兰黛一度获利颇丰，但如今却一直困扰着它。
中国综合症
与许多西方奢侈品公司的高管一样，傅懿德也无法抗拒中国市场的召唤。在疫情爆发前几年，零售专家就预测，中国将与美国并驾齐驱，甚至超越美国，成为世界上最大的奢侈品市场。原因不难理解：根据麦肯锡（McKinsey）几年前的一份报告，仅从2008年到2014年，中国购买奢侈品的家庭数量就翻了一番。
很快，奢华购物中心在上海和北京这样的商业中心如雨后春笋般涌现，蒂芙尼（Tiffany）和路易威登（Louis Vuitton）等品牌纷纷入驻。在劳德家族的支持下，傅懿德抓住了这一机遇，在中国各地开设门店，并建立起分销网络。雅诗兰黛比大多数西方美妆品牌更早进入中国市场，不仅在大城市稳固根基，而且在西方品牌涉足较少但潜在需求很大的所谓二三线城市站稳脚跟。它还在“旅游零售”领域建立了强大影响力，在大型新机场开设门店，并在特别受中国购物者欢迎的免税店中占据重要地位。
很长一段时间里，傅懿德的策略都很奏效：2014年，雅诗兰黛在亚太地区的销售额为22.3亿美元；经过多年的迅猛增长，这一数字在2021年达到了54.9亿美元的峰值。那一年，雅诗兰黛在亚洲的市场份额超过了美洲。亚洲市场约占雅诗兰黛当年收入的34%，远高于大多数西方公司在中国市场所占的份额——这使得雅诗兰黛在中国消费市场形势恶化时更加脆弱。
诚然，疫情是罪魁祸首之一。在疫情爆发初期，亚洲消费者与北美和欧洲消费者一样，在护肤品上的支出有所增加——这是整体消费者关注健康的一部分，从而提升了雅诗兰黛的销售额。但好景不长，疫情对中国市场造成了严重破坏。由于旅游受限，旅游零售额大幅下降。由于消费者变得谨慎，奢侈品变得可有可无。随着中国经济艰难从疫情中复苏，年轻消费者的高失业率加剧了困境，同时越来越多的消费者倾向于尝试本土品牌。
雅诗兰黛的亚太区业务已连续三年下滑：2024财年的销售额为48.9亿美元，比2021年的峰值低16%。但收入下降只是问题的一部分。毕竟，事实证明，中国市场近来一直困扰着许多其他西方公司，尤其是苹果（Apple）和星巴克（Starbucks），以及法国奢侈品集团路威酩轩集团（LVMH），以及宝洁公司和日本资生堂（Shiseido）等美容行业的竞争对手。
但雅诗兰黛在预期中国市场繁荣（如今像蛋奶酥一样滑落）的情况下投入了巨额资金，如今这些投资正反噬该公司。例如，雅诗兰黛2018年投资10亿美元在日本建立了一家制造工厂，以便更快地为中国消费者提供产品。如今，由于需求疲软，该工厂的产量下降，产能过剩导致公司利润流失。
供应链问题也加剧了中国市场危机。根据彭博社2023年的一篇报道，雅诗兰黛不得不提前数月向中国免税店发送商品，以便备货，这使得公司没有足够的空间通过调整库存来应对销售趋势的突然或长期变化。当中国终于在2023年重新开放时，该公司运送了大量商品，结果却发现这些商品滞留在商店里，因为它们抵达的时间恰逢中国奢侈品市场和整体经济大幅放缓。
从那时起，该公司就一直努力清理未售出库存，但损失惨重，而且花费的时间也超出了最初预期。这一遗留问题正是导致华尔街持观望态度的核心原因，而且目前还看不到缓解迹象。贝恩咨询公司（Bain & Co.）的数据显示，中国大陆奢侈品市场2024年萎缩18%至20%，回落至2020年的水平。贝恩咨询公司预计，在中国经济刺激措施生效之前，今年的销售额将持平。
本土忧伤
中国并非雅诗兰黛唯一陷入困境的市场。在其本土市场美国，雅诗兰黛的市场份额也在不断下滑，而法国巨头欧莱雅集团（L’Oréal）则乐于填补空缺，甚至在所谓的名品市场（即业内所说的奢侈品市场）也是如此。
多年来，该公司在美国的收入一直依赖于在内曼·马库斯（Neiman Marcus）或萨克斯（Saks）（偶尔也包括好市多（Costco）销售海蓝之谜、在梅西百货（Macy ‘s）销售魅可或在诺德斯特姆（Nordstrom）销售艾凡达。随着百货公司在2010年代逐渐失去光彩，雅诗兰黛将更多销售转向了更受欢迎、相对低端但增长更快的零售商，比如商业广场的知名品牌Ulta Beauty和路威酩轩集团旗下的丝芙兰（Sephora）。傅懿德数年前对《财富》杂志表示：“如果Ulta能提供良好的展示、客流量、培训和体验，那么商业广场也是不错的选择。”
然而，尽管雅诗兰黛向更多的零售平台进行了扩张，但这并未能保护其在美国的销售业绩。当然，这并不意味着完全没有机会：根据数据研究公司Circana的报告，2024年前九个月，美国名品市场实现了7%的增长。但这一数据也凸显了雅诗兰黛在美洲地区，尤其是美国市场的销售疲软态势。雅诗兰黛在美国的销售额在2024财年仅增长了1%。
这些困境促使雅诗兰黛做出了数年前还难以想象的举动。为了重振其同名品牌——这一曾在1946年由约瑟芬·埃丝特·门泽尔（Josephine Esther Mentzer）引领美容行业变革的品牌——该公司于10月份在亚马逊上开设了一家官方商店。然而，据《华尔街日报》2023年的报道，这一举措在家族内部引发了分歧。创始人之子、威廉·劳德的父亲伦纳德·劳德（Leonard Lauder）对此表示反对，他担忧在亚马逊上销售产品会损害品牌的声誉。
代沟
从雅诗兰黛迟迟才决定进驻亚马逊这一举动中，我们不难看出，该公司的部分困境似乎与代沟问题息息相关。尽管雅诗兰黛收购了一些备受年轻人喜爱的品牌，但它一直在努力适应千禧一代和Z世代的购物习惯与品味，尽管这些年轻消费群体已日益成为奢侈品市场中的重要组成部分。
在这个网红不断推广新兴美容品牌的世界里，该公司的创新步伐相对缓慢且呆板。WSL Strategic Retail首席执行官温迪·利布曼（Wendy Liebmann）表示：“在过去10年里，创新的源泉来自于那些诞生于普通人家厨房水槽旁的新品牌，它们面向的是追求更清洁、健康、有效产品的年轻受众。雅诗兰黛本身并不愿意颠覆部分较为成熟的业务。”
其中一个由网红推动的趋势是皮肤科产品热潮——这些护肤品的配方旨在修复或至少避免损伤使用者的皮肤。欧莱雅在雅诗兰黛之前就加入了皮肤护理产品热潮，旗下产品包括2017年收购的适乐肤（CeraVe）和次年收购的理肤泉（La Roche-Posay）。相比之下，雅诗兰黛直到2021年才成为加拿大公司Deciem的大股东，看中的是其较低的定价和在被称为“护肤达人”的人群中取得的进展。
随着社交媒体不断激发人们对新奇事物的渴望，那些更加年轻、灵活的品牌一直在利用这一趋势。例如，自2020年以来，e.l.f Beauty的销售额几乎翻了两番，并在去年成为价值10亿美元的品牌，而这其中有一部分增长正是得益于雅诗兰黛市场份额的缩减。e.l.f Beauty深受那些精通Instagram的年轻购物者的喜爱，同时，由于其运营成本相对较低，也使其能够保持可观的利润空间。
艰巨的任务
要解决这些问题，新任首席执行官要做的事情很多。自10月底德·拉·法维里被任命为首席执行官以来，该公司股价上涨了约25%，但仍远低于数年前的高点。与此同时，德·拉·法维里是傅懿德最终存在缺陷的战略的主要策划者，这一事实削弱了投资者的热情。富国银行（Wells Fargo）分析师在最近一份研究报告中表示，他们对于任何复苏迹象能否持久持“怀疑态度”。
德·拉·法维里也将减少来自创始家族的直接指导：虽然董事会中仍有很多劳德家族成员，但随着简和威廉的离开，高管层有史以来首次不再包含劳德家族成员。
分析人士一致认为，德·拉·法维里之所以被选中担任这一要职，很可能是因为他对这家复杂的公司有深入了解，并能迅速采取行动；该公司似乎认为，这种经验比聘请一位具备转型经验的变革者更为重要。麦肯锡最近的一份报告预测，到2028年，美容行业的销售额将达到5900亿美元，雅诗兰黛必须做好抢占份额的准备。
傅懿德本人在10月份就向投资者透露了其继任者需要做的事情。他说：“我们需要品牌建设者，但我们也需要有紧迫感、行动迅速、且勇于实施必要变革的人。”如今，他的接班人将有机会证明自己能否助力这家标志性企业完成转型。（财富中文网）
译者：中慧言-王芳
Estée Lauder faces its next fraught rendezvous with Wall Street on Tuesday, when the struggling Fortune 500 beauty giant reports its latest quarterly earnings. But if its executives, including its brand-new CEO, are nervous, they can take solace in one thing: This week’s report almost certainly can’t be as bad as their last one.
Back in October, while releasing a particularly dismal earnings statement, Estée Lauder—whose globe-spanning luxury brands include MAC, Aveda, Le Labo, and Clinique—shocked shareholders by slashing its dividend by nearly half to preserve cash. Not only did the company fail to put any upbeat lipstick on that pig, it withdrew its financial forecasts, the kind of action that is very triggering for investors. Shares fell 21% that November day, the biggest one-day drop ever for the 79-year-old company.
The fact that Estée Lauder had repeatedly lowered its forecasts over the prior two years only fanned the sense that executives didn’t have a handle on the business. And indeed, management suggested it didn’t have a sense of when its problems, led by its long, profit-decimating China sales slide, might end. “Estée Lauder was an incredible company…but given the collapse in profits, I’m not sure it still is,” famed investor Whitney Tilson of Stansberry Research wrote in a subsequent paper. Yes, it has a strong brand, Tilson added, but he slammed the company as “totally mismanaged.”
The numbers certainly back up critics like Tilson. In fact, the totemic beauty company is more than three years into a meltdown that has crushed both revenue and profits. It has also clobbered investors: Since hitting an all-time high of $374.20 in January 2022, shares have slid an astounding 78%.
In market capitalization terms, the stock tumble of the last three years has stripped more than $100 billion from the company’s value. That’s an especially painful punch for the founding Lauder family, which holds nearly 35% of the company’s outstanding shares (and 84% of voting power). The company declined to comment.
In its fiscal 2024, which ended on June 30, Estée Lauder reported revenue of $15.6 billion, down 12% from its 2022 peak. Sales were slipping, but profit was in free fall. Net earnings of $409 million were down 60% from the year before. And in the first quarter of the current fiscal year—the one reported on that disastrous October day—the company reported a net loss of $156 million, fanning fears of further deterioration.
“Totally mismanaged” or not, it’s clear the company has failed to adapt to a rapidly churning luxury market. What’s more, Estée Lauder is suffering today from having failed to pivot away from strategies that looked great as recently as three to five years ago. A huge bet on China’s luxury market under then-CEO Fabrizio Freda helped the company soar in the 2010s, but has become a major drag on results today; meanwhile, Estée Lauder skin care and cosmetics brands that took off with boomers and Gen X have failed to win fans among consumers under 40.
The company’s stumbles have coincided with a schism between two factions among the Lauders over how to arrest the decline, as the Wall Street Journal has reported. That schism pitted Jane Lauder—the company’s chief digital officer, who wanted Estée Lauder to make bolder moves to appeal to younger shoppers—against her cousin William Lauder, the former executive chairman, former CEO, and grandson of the company’s namesake founder, who had favored Freda’s strategies.
Over the past three months, Jane and William Lauder and Freda have all left the C-suite, so the investors’ call this week will be the first with longtime Estée Lauder insider Stéphane de La Faverie at the helm. The new CEO will get a chance to update investors on the progress, or lack thereof, in finally getting the company back on track.
It will be on de La Faverie to end the company’s sales hemorrhage in China, make the company’s global supply chain more effective, appeal to younger shoppers by tapping more reliably into sites like TikTok—and reenergize a core group of brands increasingly associated with older shoppers. And he’ll have to do it all while managing the expectations of a founding family that’s still very much in control—and won’t settle for also-ran status in the luxury race.
A great decade before the fall
For years under Freda, Estée Lauder was a juggernaut. Freda, a former Procter & Gamble executive who had led P&G’s mammoth snacks business, joined Estée Lauder in March 2008 as president and chief operating officer. Sixteen months later, he became CEO, the first person from outside the Lauder family ever to fill that role.
Investors and analysts credit the Italian-born and -educated Freda with bringing the financial and professional discipline instilled at P&G to the beauty company, as well as with modernizing its tech. Freda also benefited from being championed by William Lauder, his immediate predecessor as CEO, in navigating family matters.
Between the day Freda started in 2009 and the day of its 2022 all-time high, Estée Lauder shares rose 643%. In his early years, Freda sharpened the focus of the company—whose portfolio now includes 24 brands—to concentrate on the higher end and full-on luxury. The company’s revenue more than doubled from $7.8 billion in 2010 to a peak of $17.7 billion in 2022.
Fabrizio Freda, CEO from 2009 through 2024, led Estée Lauder through several boom years before its recent slump.
LEXIE MORELAND/WWD/PENSKE MEDIA—GETTY IMAGES
During the Freda era, Estée Lauder also made a lot of acquisitions aimed at winning over younger consumers. While the namesake Estée Lauder brands and others like luxe skin care product La Mer enjoy mammoth sales, they do cater to an older clientele. Freda’s acquisitions have included fragrance brand Le Labo, makeup line Two Faced, and skin care brands Decium from Canada and Dr. Jart from Korea.
More fatefully, Freda was early in making a big bet on the Chinese luxury market. That bet would profit Estée Lauder enormously for a while—but is haunting it today.
China syndrome
Like many Western luxury executives, Freda could not resist the call of the Chinese market. For years before the pandemic, retail experts predicted that China would rival, perhaps even overtake, the United States as the top luxury market in the world. It’s easy to see why: According to a McKinsey report from a few years ago, from 2008 to 2014 alone, the number of Chinese households purchasing luxury products doubled.
Soon enough, luxury malls mushroomed in hubs Shanghai and Beijing, boasting Tiffany and Louis Vuitton stores. With the Lauder family’s blessing, Freda pounced on the opportunity—seeding stores throughout the country and building a distribution network. Estée Lauder wound up being earlier than most Western beauty brands to enter China, establishing itself not only in the major cities but in smaller so-called Tier 2 and Tier 3 cities where Western brands were less present—but potential demand was high. It also built a big presence in “travel retail,” with stores in massive new airports and a major presence in duty-free shops, locations particularly popular with Chinese shoppers.
For a long time, Freda’s strategy worked: In 2014, Estée Lauder’s sales in the Asia Pacific were $2.23 billion; years of blistering growth brought that total to a peak of $5.49 billion in 2021. That year, Asia was a bigger market for the company than the Americas. That represented around 34% of Estée Lauder’s revenue that year, much greater exposure than most Western companies had to China—which made the company that much more vulnerable when the Chinese consumer story turned sour.
COVID, of course, was one culprit. In the early days of the
pandemic, Asian consumers, like those in North America and Europe, spent more on skin care products—part of an overall consumer focus on wellness—lifting Estée Lauder’s sales. But soon enough, the pandemic wreaked havoc with the Chinese market. With travel curtailed, travel retail sales plummeted. Luxury items became expendable as consumers got nervous. As China struggled to recover economically from the pandemic, high unemployment among young Chinese consumers added to the pain, as did a growing inclination to try local brands.
Estée Lauder’s Asia Pacific business has fallen for three years in a row: Sales for fiscal 2024 came in at $4.89 billion, 16% below their 2021 peak. But falling revenue tells only part of the story. After all, China has proved vexing of late for many other Western companies, notably Apple and Starbucks, as well as French luxury conglomerate LVMH and rivals in the beauty industry like Procter & Gamble and Japan’s Shiseido.
But Estée Lauder made some particularly big investments, in anticipation of a China bonanza that fell like a soufflé, and those are now coming back to bite the company. For example, Estée Lauder invested $1 billion in 2018 to set up a manufacturing facility in Japan so it could more quickly serve Chinese consumers. That facility now produces less due to weaker demand, and the overcapacity is a drain on the company’s profit.
Supply-chain problems have also exacerbated the China crisis. According to a 2023 Bloomberg report, Estée Lauder had to send merchandise to duty-free shops in China months in advance so they were stocked, leaving the company with less room to react to any sudden or prolonged change in sales trends by changing up inventory. When China reopened in 2023 at long last, the company shipped a ton of merchandise—only to see those goods get stranded in stores, since their arrival coincided with a big slowdown in China’s luxury market there and its economy in general.
The company has been working ever since to clear out unsold inventory, at big losses, and it has taken longer than initially expected. That lingering problem is at the heart of why Wall Street is in wait-and-see mode—and there isn’t really much relief in sight. According to Bain & Co., mainland China’s luxury market shrank 18% to 20% in 2024, back down to 2020 levels. For this year, Bain expects sales to be flat before economic stimulus in China kicks in.
Home country blues
China is not the only market in which Estée Lauder has flailed. The company has lost market share in the United States, its home market, with French giant L’Oréal more than happy to pick up the slack, even in the so-called prestige segment of the market, an industry shorthand for luxury.
For years, the company’s U.S. revenue depended on sales of La Mer at Neiman Marcus or Saks (and occasionally Costco), MAC at Macy’s, or Aveda at Nordstrom. As department stores lost much of their luster in the 2010s, Estée Lauder shifted more of its sales to popular, and comparatively down-market, but faster growing retailers like strip-mall fixture Ulta Beauty and LVMH’s Sephora. “There is nothing wrong with strip malls if Ulta has a nice presentation, traffic, training, and experience,” Freda told Fortune a few years ago.
But expanding into more retail platforms hasn’t protected the company’s U.S. sales. It’s not like there’s no opportunity there: Data research firm Circana says that the U.S. prestige market rose 7% in the first nine months of 2024. But that just underscores Estée Lauder’s anemic Americas sales, primarily made up of the U.S., which rose only 1% in fiscal 2024.
These struggles have prompted Estée Lauder to do what would have been unthinkable just years ago. To revitalize its namesake brand that helped Estée Lauder herself, née Josephine Esther Mentzer, transform the beauty industry in 1946, the company launched a store on Amazon in October. That move was a source of division within the family, the Wall Street Journal reported in 2023. Leonard Lauder, son of the founder and father of William, was opposed to selling on Amazon, fearing it would dent the brand’s cachet.
A generation gap
As the company’s late arrival to Amazon suggests, part of Estée Lauder’s woes seems to be generational. Despite Freda’s purchases of some youth-friendly brands, the company has struggled to adapt to the shopping habits and tastes of millennials and Gen Z, even as those younger consumers have grown into a bigger segment of the luxury market.
The company has suffered from a relatively slow, stodgy pace of innovation in a world where new beauty brands are promoted nonstop by influencers. “In the last 10 years, the dynamic of innovation has come from newer brands that have just literally bubbled up from somebody’s kitchen sink aimed at a younger audience looking for cleaner, healthier, more effective products,” says Wendy Liebmann, CEO at WSL Strategic Retail. “Lauder itself was loath to disrupt some of their more established businesses.”
One such influencer-driven trend has been the craze for dermatological products—skin care wares formulated to repair, or at least avoid damaging, users’ skin. L’Oréal jumped on the dermatological product craze before Estée Lauder did with a roster that includes CeraVe, acquired in 2017, and La Roche-Posay, bought the following year. In contrast, it was 2021 before Estée Lauder became a majority owner of Canadian company Deciem, drawn to its lower pricing and its inroads with the skin care aficionados called “skintellectuals.”
With social media driving demand for novelty, younger, nimbler brands have been capitalizing. e.l.f Beauty, for instance, has nearly quadrupled in sales since 2020, becoming a billion-dollar brand last year, some of that at Lauder’s expense; it’s beloved by young, Instagram-savvy shoppers, and profitable thanks to low operating costs.
A tall order
Addressing these snags adds up to a big to-do list for the new CEO. Since de La Faverie was named CEO at the end of October, shares have risen about 25% but remain very far from their highs from a few years ago. At the same time, de La Faverie was a major architect of Freda’s ultimately flawed strategy, and that fact has tempered investors’ enthusiasm. In a recent research note, Wells Fargo analysts said they “don’t have confidence” yet in the durability of any green shoots.
Stéphane de La Faverie, pictured here speaking at a 2022 fundraiser, became Estée Lauder’s CEO on Jan. 1.
STEFANIE KEENAN/GETTY IMAGES FOR ESTÉE LAUDER
De La Faverie will also have less immediate guidance from the founding family: While the board is still full of Lauders, with the departure of Jane and William the C-suite is without a Lauder for the first time ever.
Analysts agree that de La Faverie was likely chosen because he knows this complex company deeply and can act quickly; the company seems to believe that such experience is more important than hiring a change agent experienced with turnaround. A recent McKinsey report predicts the beauty sector will reach $590 billion by 2028, and Estée Lauder must be ready to grab its share.
Freda himself told investors in October what his successor needs to do. “We need brand builders, but we need also people that will act with urgency, speed, courage to make the needed changes,” he said. Now his apprentice will get the chance to show whether he can help this iconic company complete its makeover.