The other shoe dropped in the Estée Lauder Cos. Inc. management succession drama Friday morning, when Leonard A. Lauder declared that he plans to step down as chairman in two years and take on the role of chairman emeritus, clearing the way for...
The other shoe dropped in the Estée Lauder Cos. Inc. management succession drama Friday morning, when Leonard A. Lauder declared that he plans to step down as chairman in two years and take on the role of chairman emeritus, clearing the way for his son William Lauder to take over.
"I certainly hope William can succeed me as chairman," Leonard Lauder told shareholders at the firm's annual meeting at Manhattan's Essex House, referring to his son and the firm's current president and chief executive officer. Following the meeting, Leonard Lauder said he has held the chairman post for 12 years, about the same period of time that Estée Lauder, his mother and the company's founder, had occupied the role. In 2009, Leonard Lauder will be 76 years old and wrapping up a career of hands-on management that spanned 51 years.
The announcement comes on the heels of the news that the family-run beauty firm has reached beyond its surname and outside the world of prestige beauty to recruit Fabrizio Freda, until recently president of the Global Snacks division of Procter & Gamble Co., as the beauty group's next president and chief operating officer, with plans to promote him to ceo within 24 months. If all happens according to these plans, Freda and young Lauder will be working in tandem as ceo and chairman.
At Friday's meeting, William Lauder said of his planned successor, "He will be a strong partner with me as we continue to drive profitable growth."
"Lauder needs an operating culture and what company has a better operating culture than P&G? Freda's appointment is a step in the right direction," said Bear Stearns analyst Justin Hott. He cautioned, however, that two years is a long time to wait for a change at the top, given the operational difficulties that the firm has weathered during the past few years.
Hott wrote in a research note Friday, "Hiring an outsider will be perceived as an admission that Estée will focus more on operational improvements than family legacies. In addition, Mr. Freda's P&G background should foster the belief that someday P&G could acquire the company."
In an article that appeared on page 1, Friday, William Lauder dismissed speculation of an eventual sale, the same stance that his father has adopted on more than one occasion.In addition to reigniting talk that P&G may look to acquire Estée Lauder, Freda's appointment prompted speculation from Wall Street Friday morning that the mass market consumer products veteran could encourage Estée Lauder to reenter the mass channel.
Many analysts said reaching outside the family ranks will help accelerate Estée Lauder's international strategy. William Lauder said Friday international sales currently account for 54 percent of the beauty firm's total sales, and he anticipates they will balloon to 60 percent to 70 percent of total sales over the next two or three years.
"Business outside the U.S. is growing three times faster than the rate inside the U.S.," said William Lauder. He anticipates that in the next decade China, which now yields close to $100 million, could be Estée Lauder's largest market outside the U.S., with Russia ranking in the top 10.
Over the next three years the company expects to generate annual sales growth of 6 percent to 8 percent, fueled largely by international sales.
In a research note Friday, Credit Suisse analyst Filippe Goossens stated that Freda may bring more out-of-the-box thinking, and perhaps pave the way for strategic partnerships to grow the company's footprint.
Goossens wrote, "Over the last few years the focus of attention within the Estée Lauder organization has increasingly shifted to its international operations, which have significantly greater prospects. While [Freda] may not have a prestige personal care background — except for a short stint at Gucci — he brings with him strong brand building expertise as the former head of P&G's international snack business, as well as the organizational discipline of P&G."
Now as Leonard Lauder contemplates stepping down as chairman in two years, he is pondering the future. When asked if this could be construed as the beginning of the end of the Lauder family era, he said, quite the contrary, the values of the Lauder family are more deeply embedded than ever. Referring to the management change, he said "the reason we chose [Freda] is that he is an instinctual marketer [in the Lauder mold]. You will see things happening."
Leonard Lauder said a group of executives, such as BeautyBank president Jane Hertzmark Hudis and specialty brands president Maureen Case, have been grounded and groomed in instinctual marketing techniques and a new generation is coming to the forefront.Lauder said stepping down will give him the time to continue traveling — "I want to go to Russia more and to China more. My ambition is to be an ambassador without portfolio." He also plans to continue teaching marketing principles to young executives in an effort to continue the company's legacy. "My responsibility is to see that the next generation carries it out," he said.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast