NEW YORK — Estée Lauder Cos. shook up its top management lineup Thursday by naming MAC Cosmetics president John Demsey as president of its flagship Estée Lauder brand.
Patrick Bousquet-Chavanne, the group president who has run the Lauder division since 2001 while also supervising MAC and the Aramis and Designer Fragrance Group, will continue to oversee Lauder’s development while Demsey directs the brand.
Bousquet-Chavanne will focus more fully on strategic initiatives, new acquisition possibilities and growth plans for Estée Lauder, as well as for MAC, Aramis, and the Designer Fragrances Group, whose brands include Donna Karan Cosmetics, Tommy Hilfiger, Kate Spade and Michael Kors. Meanwhile, Demsey will continue the brand rejuvenation process begun by Bousquet-Chavanne.
“I’m very excited about the broadening of my responsibilities within the Estée Lauder Cos.,” Bousquet-Chavanne said Thursday, calling three years of leading Lauder’s day-to-day operations “an incredible adventure.” Going forward, he added, “the focus of my energy will be on achieving William [Lauder]’s vision of getting us to be a $10 billion company.”
The company reported net sales of $5.79 billion for the fiscal year ended June 30, 2004; while Lauder does not break out sales figures of individual brands, industry sources estimated that the Lauder brand is approaching $2 billion in retail sales, while MAC is said to be in the neighborhood of $500 million in retail sales.
A successor for Demsey at MAC has not yet been named, although that announcement is expected within the next few weeks.
In an exclusive telephone interview with WWD from Asia on Thursday, William Lauder, the recently minted Estée Lauder chief executive officer, explained that relieving Bousquet-Chavanne of day-to-day responsibilities of running the Lauder division “will allow Patrick to spend more time on the more strategic issues.”
Asked what issues he has in mind, Lauder said the company has “a tremendous opportunity in the fragrance world,” particularly overseas. Lauder pointed out that two of the largest fragrance markets are Europe, where 60 percent of the beauty business is made up of fragrance, and travel retail, where the same ratio holds.
Lauder also said the new dynamic will give Bousquet-Chavanne a different perspective on the Lauder brand, since he will be viewing it from a more elevated vantage point. As well, he praised the job that Bousquet-Chavanne has done in restoring the luster of the Lauder brand. “Patrick has done an exceptional job,” he said, while also lauding Demsey’s obvious skills and abilities. “I want John to take it to the next level.”
Lauder said, “The brand continues to evolve in the clarity of its message and communication. What the brand needs to do is to put all the disparate elements together. It is one of the leading fragrance brands. It’s one of the leading treatment brands. It’s one of the leading makeup brands.
“Add it all up,” he continued, “and it’s one of the leading brands altogether. The question is how to add up these elements to push the homogeneity of the brand and propel it forward.”
Lauder indicated that a new president will be named for MAC within a few weeks, and said that executive also will oversee the development of the Sean John brand, which will be distributed by the Aramis and Designer Fragrances Group. A general manager for the Sean John division also is expected to be named.
Bousquet-Chavanne called Demsey “the perfect executive to continue Estée Lauder’s growth plan,” noting that at MAC, Demsey has exhibited “a tremendous fashion sensibility” as well as an ability to grow the brand on a global basis. MAC is currently available in 45 countries.
“Lauder is very well positioned in Europe and Asia, as well as in the U.S.,” said Bousquet-Chavanne. “As such, the brand requires a global thinker at the helm. And John not only has that ability, he has a great entrepreneurial spirit.” He also noted that this move “indicates William’s commitment to growth for this organization.”
In fact, the move is a return to roots for Demsey, who, until joining MAC Cosmetics in April 1998 first as general manager and then as president, had been senior vice president of sales and education for the Estée Lauder brand. Demsey spent seven years at the Lauder brand, first signing on in 1991 as vice president and West Coast field sales manager. His rise through the ranks was quick — a 1992 appointment to group vice president, sales, for the West Coast; a 1993 promotion to senior vice president of sales for the brand, and a 1995 move that added education responsibilities to his duty list.
After the Lauder Cos. completed its purchase of MAC in 1998, Demsey moved to MAC to help spearhead its growth within the Lauder organization. Prior to joining Estée Lauder, Demsey was vice president of sales for Borghese, Alexandra de Markoff and Lancaster cosmetics. Earlier in his career, he held executive positions with both Bloomingdale’s and Saks Fifth Avenue.
In his new role, Demsey’s first duty will be to “relearn the Estée Lauder business, and to understand from an Estée Lauder perspective the global dynamics and the opportunities that this brand has before it.” He vowed to look at the brand with “fresh eyes — with a sense of the heritage of the brand, and where it’s going.” And, he added, “there will be a transition period [between his two roles] as I have a responsibility to make sure that transition is done respectfully and responsibly.”
Once that transition is complete, Bousquet-Chavanne will closely examine global channel diversification opportunities for the company, particularly those in the European market, he said. As well, he will examine regional dynamics around the globe, looking at both regional-only products and their prospects for globalization.
And, while Bousquet-Chavanne would not comment on specifics, he did hint that acquisitions could be part of the company’s strategy to grow the Estée Lauder Cos. in the short term. “Much of the growth of the organization [in the last several years] has been internal,” he said. “The company has done an amazing job of doing this, but to get to a $10 billion level, we will also need to look at other areas.”
Bousquet-Chavanne joined the Lauder brand in 2001 with a mandate of continuing to drive the brand’s evolution process. Under his direction, the brand has made a number of strides, including signing models Carolyn Murphy and Liya Kebede to supplant Elizabeth Hurley in advertising efforts; revamping packaging and counter designs; building on the brand’s strengths in skin care and color cosmetics, and launching a powerhouse fragrance masterbrand, Beyond Paradise.
Demsey’s prowess in building a multichannel, multinational, financially driven distribution network at MAC will come in handy as the Estée Lauder brand’s freshening efforts continue. Over the past several years, the Lauder brand has attempted to ratchet down the age of its core consumer a bit, in particular with an aim of increasing the brand’s relevance among consumers in the 25- to 35-year-old age bracket.