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Lauder Taps Philippe Pinatel to Lead MAC Cosmetics

Karen Buglisi Weiler is stepping down from her role as MAC's global brand president after two decades.

What exactly is going on at MAC Cosmetics?

Quite a bit it seems, from a changing of the guard at the management level to an execution of a global distribution strategy that aims to fundamentally redefine how the $4 billion business has done retailing to date.

WWD has exclusively learned that industry veteran Karen Buglisi Weiler is stepping down from her role as MAC’s global brand president after 20 years and Philippe Pinatel has been named her successor. On March 5, Pinatel will begin a four-month immersion program before taking over the operational reins of the brand in July as senior vice president, global general manager. At that time, Buglisi will transition into an advisory role through Dec. 31, when she officially exits the company.

Pinatel is coming off a three-year stint at e-commerce-based beauty subscription service and retailer Birchbox, where he served as president and chief operations officer. Prior to that he was Sephora Canada’s senior vice president and general manager.

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“Philippe’s first order of business is to immerse himself in what makes MAC, MAC,” Fabrizio Freda, president and chief executive officer of the Estée Lauder Cos. Inc., told WWD. “Philippe will focus on gathering emotional intelligence about MAC’s unique brand DNA. These insights will help him to swiftly identify new global opportunities for the brand to help drive meaningful, profitable growth in the U.S. and abroad.”

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Bringing Pinatel in is a surprising move for Lauder, which almost never hires senior executives from outside the family.

“It’s an important signal that we realized that we could use fresh thinking. It’s very rare that we go outside the company for a job,” John Demsey, executive group president at the Estée Lauder Cos., said during an interview Monday. Demsey, who called this a “historic transition,” pointed out that Buglisi Weiler was his first hire after Lauder acquired the company exactly 20 years ago and has “been with me every step of the way.”

“What Karen brought to MAC in terms of passion, love and drive and sense of culture and dynamic personality was part of the drive that fueled this brand basically to grow to 90 times what it was,” Demsey added.

Under Demsey’s tutelage, Buglisi Weiler and former creative director James Gager (who also spent nearly two decades at MAC) are credited with taking what started in a hair salon in Toronto and turning it into a multibillion-dollar, global makeup brand. Today, MAC is sold in 106 countries and operates 3,400 freestanding doors.

But a rapidly changing retail environment and an ever-informed, digital-first customer required a pace of change that MAC was unable to adapt to as swiftly as many of its newer, more nimble peers. The result was a deceleration in the U.S. business that Lauder’s now scrambling to turn around.

“He’s [Pinatel] going to a bring a fresh look at the 360-degree marketing dialogue and business dynamics. The world is very different today, the competitive set is very different. The way that Tmall, Instagram and Facebook have fundamentally transformed the way that the business works today is dramatically different than it even was two to three years ago,” Demsey continued.

Buglisi Weiler’s retirement follows last year’s departure of industry icon Gager, who was replaced with his longtime number two, Toni Lakis. Gager was said to have been pushed out in favor of someone who could more effectively lure — or lure at all — the coveted Gen Z and Millennial customers the brand was losing to newer, digital-first makeup brands from Urban Decay to Nyx to Colourpop.

Additionally, while the brand is seeing growth internationally, MAC has had its share of well-documented struggles domestically, largely due to a diminishing department store business in the wake of decreased foot traffic to malls. This is magnified by a market-wide uptick in skin care and slow down in the color category and MAC’s longtime focus on freestanding stores during a time when beauty specialty stores have seen explosive growth as a retail channel. Ulta Beauty and Sephora (take your pick) are the places to be for a beauty brand today, and until recently, MAC had no presence in any of these retailers.

Entry into speciality retail via Ulta Beauty, first on in May and then in 20 doors a month later, was seen as a step in the right direction as the brand took its first steps to diversify its distribution channels. MAC’s online launch with Ulta exceeded the first week’s goals in less than 48 hours, becoming the retailer’s most successful e-commerce launch to date. MAC is carried in 127 doors nationally.

Tara Simon, senior vice president of prestige merchandising at Ulta, said she was shocked when she learned how many customers were discovering MAC for the first time at the retailer.

“I thought, ‘Wow, the number-one makeup brand on the planet, certainly everyone knows MAC’ — but in our store that hasn’t been the case. That’s been a big win because it’s a new consumer, either someone is coming in because they are an Ulta shopper because they love Ulta and are like, ‘Oh cool, here’s a new brand,’ or they headed to Ulta because they heard it has MAC. It’s a whole different traffic pattern and a whole different acquisition opportunity for them,” Simon explained.

Although she was unable to provide an exact store count, she confirmed that 2018 will see a MAC rollout that’s “in line” with last year’s openings. The retailer is putting the brand primarily in new doors, as well as locations that undergo significant renovations because of MAC’s “big footprint” in-store and a host of entirely custom elements.

“It’s a rolling plan through 2018 and that’s how we’ll go into the future. We’ll continue to roll out the brand. It [MAC] won’t be in every new store, but we’re considering every new store. We’re looking at it together…it depends on volume and competition and business around the store,” Simon said.

Globally, a slew of retail partnerships kicked off last year, including a launch on China’s Tmall in May; an opening at Eveandboy in Thailand in March; entry into 22 Mecca Maxima doors and in Australia in October, and a rollout in Sephora Brazil in August (MAC is sold in five doors in Brazil and plans to up the door count through the end of the fiscal year). Early next month, MAC will go into Sephora Mexico online (and in store in April) and on March 14 will kick off a partnership with Asos. Additionally, MAC teamed with Bumble and bumble on a new retail concept — and first co-branded location — that bowed in Dallas’ NorthPark Center in December. The MAC & Bumble and bumble Makeup and Hair Studio is a 2,200-square-foot space that’s half retail store and half express salon specializing in blowouts and makeup application.

“We have seen market improvement in the U.S. in the last couple of months. The brand is on its path to strong growth. It’s a big brand, it’s not a start-up doing $50 million year. Four-billion-dollar brands don’t grow 20 percent a year,” Demsey said.

That may be true, but are these efforts enough to save MAC’s domestic business in the U.S.?

Stifel analyst Mark Astrachan thinks so, but it might take some time. A large part of the problem is the legacy distribution points, he said, and given the size of the overall brand and that much of this is taking place in the U.S., MAC will have to “cycle through the changes of these midtier department stores.” He believes MAC didn’t “have much of a choice” in going into Ulta.

There’s also fierce competition to think about — and it’s not just coming from prestige.

“All parties will deny it, but it’s hard not to see similarities in Nyx and MAC. Aren’t they both professional makeup artists brands being sold to people? On top of that, the deceleration coincidentally came as the Nyx brand was accelerating in the U.S.,” Astrachan pointed out.

He added: “The hardest part of all of this is how do you reinvent the brand and the rate of demand for something that used to be ‘The Brand.'”