DOW JONES NEWSWIRES
Estee Lauder Cos. (EL) said Chairman Leonard Lauder will retire
July 1, clearing the way for his son William to oversee the board
while giving up day-to-day operations of the company.
William Lauder is currently chief executive, but will give that
title to President and Chief Operating Officer Fabrizio Freda, who
will be responsible for developing the company's strategy and
investment priorities, among other things. He will also become a
board member.
Freda started with the company in March 2008 after being hired
from Procter & Gamble Co. (PG) with the intention of replacing
William Lauder, grandson of the company's founder, as CEO within
two years.
Estee Lauder said Thursday Freda has been a "key architect" of
the company's strategic plan, which includes focusing on its core
brands and moving into new markets while streamlining operations
and turning around underperforming brands.
The 48-year-old William Lauder is moving aside at a time of
tumult for the beauty-products industry. Traditionally, the
high-end beauty industry is considered relatively resistant to
economic slowdowns because women are thought to be reluctant to
scrimp on makeup and skin care, especially anti-aging regimens. But
these days even daily beauty habits are taking a hit.
In its latest quarter, the owner of higher-end brands such as
Clinique and MAC reported sharply lower sales and a 30% slump in
net income while giving a bleak outlook for the rest of its fiscal
year. Estee Lauder also announced plans to cut 2,000 jobs, or 6% of
its work force, over the next two years.
Shares closed Wednesday at $25.25 and there was no premarket
trading. The stock has lost half its value the past six months.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com