Board approves appointment of ex-P&G man as CEO of Estee Lauder
Freda joined the company over a year ago as chief operating officer after previously heading up the Global Snacks division at Procter & Gamble.
His appointment is a break from tradition for Estee Lauder, which has tended to promote its senior executives from within the company or even from within the Lauder family.
Background of new CEO
Freda’s background in food also raised eyebrows when he first joined Estee Lauder at the end of 2007.
However, the new CEO has spent over a decade in Health and Beauty Care at P&G and Estee Lauder said he has so far been successful at the company working as a “key architect” in its long-term plan to increase market share in luxury beauty and improve profitability.
William Lauder, who is stepping down as CEO, said: “Fabrizio is a superb leader. In just one year, he has done a tremendous job in leading the implementation of our company’s long-term strategic plan.
“Fabrizio expertly balances the need for greater efficiencies and financial discipline while fostering innovation and creativity.”
Estee Lauder has already brought out the rod of financial discipline announcing in February a restructuring program that involves 2,000 job cuts, roughly 6 percent of its workforce.
Weak sales figures for prestige cosmetics
Like other companies in the prestige market, Estee Lauder is struggling to maintain sales growth and expects turnover to remain stagnant or even fall 3 percent in the fiscal year 2009.
Such expectations are in line with the direction of the market, according to a report released this week by NPD Group. The market research firm estimates that under the weight of the economic crisis, sales of prestige beauty products in the US fell 3 percent in 2008.
Freda will be hoping to defy the downward direction of the market by increasing Estee Lauder’s market share when he takes over at the top in July.
Meanwhile the incumbent CEO William Lauder will become executive chairman in July and Lenard Lauder, the current chairman, will step down to the position of “chairman emeritus”.
