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24 Aug

Leonard A. Lauder to Leave Board of Directors –

It’s the top of an era: Leonard A. Lauder will step down from the board of directors of the Estée Lauder Cos. in November when his current term expires.

Lauder, who turned 90 this 12 months, will retain the title of chairman emeritus of the firm, which was founded by his parents, Estée and Joseph Lauder, in 1946. He will even proceed his role as “chief teacher officer,” and be involved in key initiatives around worker engagement and brand symposiums.

“You’ll still see me out and about, and maybe at your desk, your retail store or at an organization event,” Lauder wrote in an internal memo to company employees obtained by WWD. “As we head into the longer term together, my calling to you is to maintain on creating, carry on pushing and carry on supporting each other. I stay up for seeing you all in motion.”

The Lauder family overall owns 35 percent of the corporate’s total common stock and about 86 percent of the outstanding voting power. Leonard Lauder stays a major stockholder of the corporate, and has the best to designate two directors. His son, William P. Lauder, occupies one in all those seats and is executive chairman of the board.

Gary M. Lauder, his youngest son, and the managing director of Lauder Partners LLC, a Silicon Valley-based enterprise capital firm, will stand for election to the board in November to occupy the second seat. That is the primary time Gary Lauder will assume an official role with the Estée Lauder Cos., although the corporate said he has periodically attended board meetings over time as an invited observer.

“My father envisioned and helped drive the expansion and expansion of our company from an iconic single brand to the worldwide, brand-building powerhouse it’s today,” William Lauder said in a press release. “It has been an incredible honor and privilege to have worked and learned from my father over time. I stay up for continuing to learn from him, and know his passion for this industry, this company, our employees and our consumers is as strong as ever.”

The news was revealed at a tumultuous time for the business, which has been particularly hard hit by the downturn in China and challenges within the travel retail channel. Last week, the corporate released its fiscal 2023 results, with full-year net sales decreasing 10 percent and diluted EPS decreasing 57 percent. Net earnings were $1.01 billion, compared with net earnings of $2.39 billion the previous 12 months.

Lauder’s struggles this 12 months have led to speculation that chief executive officer Fabrizio Freda may be forced to exit his role. Those reports were quelled in May when William Lauder and the board of directors sent an internal memo to employees reiterating the family’s support for the chief.

In his internal memo, Leonard Lauder once more voiced his strong support for the corporate’s current leadership, writing “I never make a move without believing in my heart our cherished company is in good hands, and I proceed to imagine within the success of our company through the skillful and thoughtful management of William, Fabrizio and all the leadership team. The nomination of Gary to the board further reflects my family’s long-term stewardship, and our support of the visions, values and folks who will drive the corporate’s success.”

The timing of Lauder’s announcement is just not considered tied to the corporate’s current performance, but is timed in reference to the traditional cadence of director nominations for the annual meeting that may happen in November.

Leonard A. Lauder at a Bloomingdale’s store opening.

Leonard Lauder joined the business in 1958, and built the enterprise into the most important prestige beauty company on this planet. He was named president in 1972 and CEO 10 years later, taking the corporate public in 1995 at a gap stock price of $26. Lauder oversaw the corporate’s globalization and an ever-expanding portfolio of brands, each incubated and bought, including Clinique, Origins and MAC Cosmetics. Today the corporate owns 24 brands and operates in 150 countries. Most recently, it ventured into fashion with the $2.8 billion acquisition of each the Tom Ford beauty and fashion businesses, which it subsequently licensed to Ermenegildo Zegna Group and, in eyewear, Marcolin.

In 2021, when asked by WWD Beauty Inc what his biggest impact on the industry has been, Lauder cited his vision of making a multibranded luxury conglomerate. “I actually imagine I created the trendy beauty industry. This is difficult for me to say, but once I joined Estée Lauder, Elizabeth Arden was Arden, Helena Rubinstein was Rubinstein, Revlon was Revlon. Everyone was a single brand operating in a single way.

“I purchased a portfolio of corporations,” he continued, “each one in all which has began a distinct aspect of the cosmetics industry. I think that every one of the acquisitions you see today and the indies that need to be acquired stem from our first acquisition of MAC — that one acquisition modified our company and indeed modified the industry.”

In 2009, Lauder handed over the reins as chairman of the board to William Lauder, but has remained very involved within the strategic direction of the corporate and relishes musing on the longer term of beauty, telling Beauty Inc, “Anyone who says they will have their finger on the heartbeat of tomorrow for all times is flawed. The challenge is to maintain up day by day. You may have to read and travel, see what is happening on this planet. You may have to maintain up to this point and know what to see and never to see.”

In the inner memo obtained by WWD, Leonard Lauder reiterated how excited he’s to proceed in his mentorship role. “I actually have at all times believed that the success of our company lies in its people, in you,” he wrote. “As I’ve said, I would like the Estée Lauder Cos. to be one of the best company on this planet. Not the most important, not the richest, but one of the best.”

“On behalf of the board, I share my deep admiration and appreciation to Leonard for his invaluable contributions to the corporate as an officer and member of the board,” said Charlene Barshefsky, the corporate’s presiding director. “He’s a visionary whose creative considering is unmatched within the industry. His progressive insights will proceed to function inspiration for us all.”

Estée Lauder also announced that Wei Sun Christianson, who has been an organization director since 2011, won’t stand for reelection in November.

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