Beauty giant Estée Lauder reviews portfolio amid slow China demand

NEW YORK: Estée Lauder Cos. is currently evaluating its portfolio of beauty brands as the company transitions to new leadership and seeks to enhance its share price, according to sources familiar with the situation. Based in New York, Estée Lauder is collaborating with Evercore Inc. for this review, which may result in the sale of certain brands, reported Bloomberg.

The company owns several well-known brands including Clinique, Smashbox, Tom Ford, and Aveda, but has been losing market share in the US to competitors like L’Oréal SA, as well as to emerging beauty startups that are more adept at leveraging social media trends. Additionally, the demand from the Chinese market has been slow to recover since the pandemic.

On Monday, Estée Lauder’s shares rose by as much as 4.7 percent in New York trading, although the stock is still down nearly 40 percent over the past year, bringing the company’s market value to around $30 billion.

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In October, Estée Lauder appointed Stephane de La Faverie as the new CEO, hoping that the seasoned executive can execute a turnaround and improve the company’s share price. De La Faverie, who has been with Estee Lauder since 2011 and previously led the flagship brand, is widely recognized for driving the company’s strong growth in high-end fragrances like Le Labo and Kilian Paris.

Negotiations are currently ongoing, and there is no guarantee that Estée Lauder will proceed with any brand sales, the sources noted. A representative from Estée Lauder declined to comment, while a spokesperson for Evercore was unavailable for immediate response.

The Lauder family holds approximately 38 percent of Estée Lauder’s total common stock and about 86 percent of the voting rights, as indicated on the company’s website. William Lauder continues to serve as the chair of the Estée Lauder board.