Estée Lauder Shake-Up: Jane Lauder Exits Top Role Amid Family Feud and Leadership Overhaul

Jane Lauder Steps Down from Key Role at Estée Lauder Companies Amidst Family Drama and Leadership Shake-Up

Jane Lauder, the esteemed granddaughter of Estée Lauder and a longstanding executive at Estée Lauder Companies (ELC), will be stepping down from her role as Chief Data Officer and Executive Vice President of Enterprise Marketing at the end of 2024. This significant leadership change comes at a time when the company is dealing with pressing challenges and ongoing internal family tensions.

Family Tensions and Leadership Struggles

The decision follows an intense period of discord within the Lauder family, one of the most influential dynasties in the beauty industry. In early September, Jane Lauder privately addressed a letter to select board members, advocating for the removal of her cousin, William Lauder, from his position as executive chairman. The letter came after Jane learned she would not be the next CEO of ELC, a role for which she had been vying. Jane’s ambition to take over the role of executive chair—held by William since 2009—added to the friction.

These events underscore a struggle for leadership within the company, with family members clashing over the direction and future of the brand. Jane’s disappointment in not securing the CEO role became a catalyst for her campaign against her cousin.

Major Leadership Changes at Estée Lauder

Fabrizio Freda, who has served as CEO of ELC, will retire at the end of June 2025. Taking his place will be Stéphane de La Faverie, a respected ELC veteran who has been with the company for several years. This appointment is part of a strategic shift to guide the company through current challenges. In another pivotal move, William Lauder will step aside from his role as executive chairman, which has sparked widespread speculation about the implications for the company’s governance and future strategy.

Jane Lauder will officially leave her executive responsibilities in October 2024. However, she will maintain a presence within the organization as a board member and will continue to hold substantial shares in the company. Her exit from the executive ranks marks a historic moment: for the first time since its founding, no member of the Lauder family will be holding a top executive position at ELC.

Challenges Facing Estée Lauder Companies

The turmoil at the leadership level comes as ELC grapples with major business challenges. One of the most pressing issues has been a decline in demand in critical markets, particularly in China. The weak performance in this region has heavily impacted the company’s overall sales, contributing to a worrying financial downturn. In 2024, ELC’s stock price plummeted by more than 50%, wiping out over $25 billion in market value. As a result, the company has embarked on a fundamental turnaround strategy, aiming to reclaim its status as a leader in the prestige beauty sector.

A Future Filled with Uncertainty

Both Jane and William Lauder, despite their personal differences, have publicly expressed their support for the company’s management and their shared commitment to the long-term success of ELC. They emphasized their continued roles as board members and influential shareholders, pledging to help steer the company through this critical phase. This shared commitment underscores their desire to uphold the legacy of their iconic grandmother, Estée Lauder, even amid family discord.

Unpacking the Family Feud

The Lauder family feud is fueled by several underlying issues, beginning with the competition for leadership succession. Jane Lauder was a contender for the CEO position but ultimately lost to Stéphane de La Faverie. This led to a clash between Jane and her cousin William, who had been a prominent figure as executive chairman. The family’s differences extended beyond succession, touching on strategic disagreements about how to address the company’s challenges.

Diverging opinions over company strategy have created significant tension. Some family members, such as Leonard Lauder, Jane’s uncle, expressed dissatisfaction with the performance of outgoing CEO Fabrizio Freda, while William Lauder remained a staunch supporter of Freda’s turnaround plans. These disagreements have fueled governance disputes, as highlighted by Jane’s letter expressing concerns about the effectiveness of the board.

Adding to the drama, Leonard Lauder relinquished his board seat last year, citing unresolved differences with William. This governance shake-up comes at a time when ELC’s market performance is under pressure.

The Impact on Company Performance

The internal strife within the Lauder family has only compounded the company’s struggles. ELC’s performance in the Asia/Pacific region has been notably weak, and the decline in North American sales has also hurt the brand. The drastic 50% drop in stock value throughout 2024 signals a loss of confidence among investors, and the company’s turnaround efforts have yet to yield a significant recovery. Addressing these challenges remains a top priority for the incoming leadership.

Mixed Analyst Reactions and Investor Sentiment

The news of Jane Lauder’s departure and the broader leadership changes have drawn mixed reactions from analysts and investors. There is widespread concern about the timing of these transitions, especially with ELC facing a steep financial downturn. Analysts have highlighted the need for strong, decisive leadership to stabilize the company. Stéphane de La Faverie’s appointment as CEO is viewed as a stabilizing move, but some investors had hoped for an outsider to bring fresh perspectives, making the reaction somewhat tempered.

The company’s stock performance has been bleak, with a near 60% drop over the last two years. However, analysts have set a 12-month price target of approximately $97.95, suggesting a potential upside of 47% from its current price of $66.58. Despite this, skepticism remains, given ELC’s ongoing struggles, particularly in its underperforming markets.

Investor sentiment has also been influenced by the governance disputes. Jane’s call to remove William Lauder raised concerns about the stability of the company’s leadership and strategic direction. How the family dynamics play out could have lasting effects on investor confidence and the company’s future.

Looking Ahead: A Pivotal Moment for ELC

Estée Lauder Companies stands at a crossroads. The departure of Jane Lauder from her executive roles, combined with the upcoming retirement of Fabrizio Freda and William Lauder stepping aside, represents a significant era of transition. As ELC navigates this critical juncture, much will depend on the new leadership’s ability to revitalize the brand and implement effective strategies.

While Jane and William remain on the board, the lack of a Lauder family member in a top executive role for the first time in the company’s history marks a turning point. The brand’s future now lies in its ability to overcome financial difficulties and restore its reputation as a global leader in beauty. Investors and analysts will be watching closely to see how the company, under new leadership, can address these challenges and reignite growth.