Beauty Giant Estee Lauder Eyes Brand Overhaul Amid Slumping Sales
As the cosmetics industry faces a downturn, Estee Lauder is taking a hard look at its portfolio of beauty brands, sparking speculation about potential sales or divestitures. The company has enlisted the expertise of Evercore Inc to guide the review process, according to sources familiar with the matter.
New Leadership, New Strategy
The move comes as Estee Lauder navigates a period of significant change. In October, the company withdrew its annual sales and profit forecasts, slashed its dividend, and appointed insider Stephane de La Faverie as its new CEO. De La Faverie took the reins on January 1, tasked with reviving the company’s fortunes.
Challenges Ahead
Estee Lauder faces stiff competition from newer beauty and skincare brands, which have eroded demand for its products. The company has also been hit by a slump in demand in China, a key market. In October, Estee Lauder warned of strong declines in the industry in the near term.
Leadership Shift
The company’s founder, William Lauder, is also stepping down from his role as executive chairman. This marks a significant change in leadership, as Lauder has been instrumental in shaping the company’s strategy.
Share Price Struggles
Estee Lauder’s shares have taken a beating in recent years, plummeting 48.7% in 2024, following declines of 41% and 33% in 2023 and 2022, respectively. However, the company’s shares saw a slight uptick on Monday, closing up about 1%.
As Estee Lauder embarks on this review process, investors will be watching closely to see which brands will remain under its umbrella and which may be spun off or sold. One thing is certain: the company must adapt to the changing beauty landscape to regain its footing.
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