NEW YORK — In a surprise move, Philip Shearer resigned Friday as a group president at the Estée Lauder Cos. Inc. after six years with the company.
Shearer could not be reached for comment and neither could William P. Lauder, president and chief executive officer, who issued a statement.
"Philip has done a wonderful job over the past six years, initially leading our international business and more recently heading up the Clinique, Origins, Aveda, Bumble and bumble and Ojon brands, as well as our online business," the statement said. "Additionally, he has been a strong contributor to our company's leadership."
Shearer's departure, effective immediately, follows a seismic shift in Lauder's top management, in which the company unexpectedly unveiled a succession plan.
On Nov. 8, William Lauder, 46, said Fabrizio Freda, the 50-year-old president of the Global Snacks division of Procter & Gamble Co., will join Lauder on March 3 as president and chief operating officer. If all goes according to plan, Freda is expected to be named ceo, succeeding Lauder, within 24 months. The next day, on Nov. 9, William's father, Leonard A. Lauder, closed the firm's annual stockholders' meeting by announcing that he plans to step down as chairman in two years to make way for his son.
Leonard Lauder, who will be 76 in 2009, told the shareholders: "I certainly hope that William can succeed me as chairman."
Lauder, who has held the chairmanship for 12 years, shaped the family firm into a global prestige market leader during his 51-year career, as well as being one of the chief architects of the modern cosmetics business.
As part of the reorganization, Freda is slated to oversee Clinique as part of his duties. That division had been the responsibility of Shearer who, in turn, was given responsibility for strategic planning.
Shearer's direct reports will now be handled by William Lauder on an interim basis until Freda arrives in March.
In 2001, Shearer had been recruited by Lauder from L'Oréal USA, where he was president of the Luxury Products Division.The Moroccan-born French-man, who subsequently became an American citizen, has a strong international management background. From 1983 to 1986, he ran Elizabeth Arden's operations in Mexico, then joined L'Oréal as managing director of the Lancôme division in the U.K. before becoming president and managing director of Lancôme Parfums et Beauté in Tokyo. He came to the U.S. as senior vice president of the Lancôme division. — Pete Born
Del Said Seeking Buyer
Revlon and Coty Inc. appear to be battling it out for pieces of Del Laboratories Inc., according to industry sources.
Del Labs, which is owned by the New York private equity firm Kelso & Co., is known in the beauty industry for its Sally Hansen nail care brand. The firm filed a registration statement for an initial public offering with the U.S. Securities and Exchange Commission in August, but industry sources said those plans appear to be delayed in the hopes of finding a strategic buyer. Sources said Revlon and Coty are most interested in Sally Hansen, while other companies might bid for Del's remaining operations.
Coty's chief executive officer Bernd Beetz, who is attempting to power the $2.9 billion firm to $5 billion by 2010, may see Sally Hansen's lip and nail care lines as a way to round out the firm's beauty business, which is heavily reliant on celebrity fragrances. Beetz has already trumpeted the company's interest in expanding deeper into color cosmetics and adding skin care, which has prompted talk that he may be interested in taking the company public.
Revlon, for its part, has a strong nail care heritage, and may seek to regain its leadership position in the category by adding Sally Hansen, the market leader, to its portfolio. The move would likely require a cash infusion from Revlon's primary owner, Ronald Perelman, ceo of MacAndrews & Forbes Holdings Inc., said Wall Street analysts.
Representatives from Coty and Revlon declined to comment. A spokeswoman for Del Labs also declined to comment, issuing the statement, "It is our policy not to comment on rumors, suppositions or internal financial matters. Del continues to aggressively pursue many exciting opportunities for both its cosmetics and pharmaceuticals businesses."Cosmetics is the lion's share of Del Labs' business, accounting for about 80 percent, or $340.7 million, of the firm's 2006 net sales, which totaled $425.9 million. Its beauty business — by virtue of its flagship brand, Sally Hansen — is focused on nail color, nail treatment, bleaches and depilatories and beauty implements. The NYC New York Color assortment is a value-priced line of cosmetics.
Financial sources said they expect more private equity firms, particularly smaller funds, to attempt to unload their investments, given lack of liquidity in the credit markets. They added the potential onslaught of firms on the selling block will begin to drive prices down for strategic buyers and cool their bidding war for acquisitions with private equity firms. — Molly Prior
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