Once a riot of damask, chintz and stately gold drapery, the 40th-floor reception area of the Estée Lauder Cos. New York City headquarters was redecorated after the pandemic in creamy shades of ecru, beige and fawn, with elegant orchids resting on marble-topped tables and discreet silver-framed family portraits scattered throughout.

Today, Stéphane de La Faverie is walking briskly to his office through the space, a fitting blank slate, if you will, for the newly anointed chief executive officer who has taken the reins during the most challenging period in the company’s 79-year history.

And just as Aerin Lauder completely reimagined the lobby that was originally designed by her grandmother and group founder, Estée, when the company moved into the General Motors building in 1969, thus is de La Faverie rewriting the playbook for the prestige beauty giant with the hopes of restoring it to a path of growth and profitability.

“Our vision is to become the best consumer-centric prestige luxury company in the world,” said de La Faverie, during an exclusive in-depth interview with Beauty Inc on the eve of his keynote speech at the WWD Beauty CEO Summit. “The fundamentals of our company are strong. We have the passion, the talent and, frankly, the energy in the organization to make change. People want to see change.”

The makeover de La Faverie is attempting goes much deeper than a decor update. It is transformational, and — not yet six months into his tenure — de La Faverie is wasting no time in making his move, significantly altering how Lauder does business by breaking down bureaucracies, dismantling long-held structures and injecting the organization with a bias toward risk taking — all this against a macro environment that is one of the most volatile in recent history.

“We’re climbing up a hill. There is no doubt about it,” said William P. Lauder, chair of the company’s board of directors. “The task is to get to the top of the hill in a manner that makes us stronger.”

As has been well documented, the hill is a steep one. Under previous CEO Fabrizio Freda, the company rode the Chinese beauty boom with a hero-product-focused strategy that saw its stock price rise to a high of $370 in January 2022, giving it a market capitalization of more than $133 billion. But the precipitous decline in the Chinese and travel-retail markets, coupled with an overreliance on saigou and an anemic innovation pipeline, took their toll. The group’s stock price declined 42 percent in 2023 and almost 50 percent in 2024. At press time, the share price was 59.71 after hitting a low of $50.06 during the stock market tumult set off by President Donald Trump’s announcement of tariffs on April 2.

For his part, de La Faverie is focused on the medium-to-long term, working through the real-time crises as they arrive but keeping his eye on the big prize. “The external volatility — I can’t ignore it. But I say to my team to focus on what we can control,” he said, noting that Lauder has weathered everything from recessions to pandemics in its history. “Every time we come out stronger,” he continued. “We’re taking the right decisions and the decisions we’re making are not small ones.

“They are structural, they are leadership, they are cultural decisions,” de La Faverie continued. “We’re going through the biggest operational, leadership and cultural change of our organization — and that will allow us to navigate the volatility much better.”

The CEO is referring to the five-part plan he introduced to Wall Street analysts during his first earnings call in February. Called Beauty Reimagined, it includes everything from a radical organizational restructuring to a plan for increasing innovation, expanding distribution and accelerating efficiencies — all while injecting agility and speed into an organization that many insiders acknowledge has become bogged down by bureaucracy and process.

(“Fewer meetings. Faster decisions,” said Jane Hertzmark Hudis, chief brand officer, of the new regime.)

Thus far, Wall Street seems to be taking a wait-and-see attitude, although as of press time, analysts are still awaiting the company’s full-year 2025 forecast, which was previously scrapped. (De La Faverie declined to comment on that, citing a quiet period before the release of fiscal-year third-quarter earnings on May 1.)

“Shares and valuation will likely remain under pressure and be a ‘show-me’ story as ELC undergoes a necessary yet potentially complex transformation,” wrote TD Cowen’s Oliver Chen after de La Faverie’s first post-earnings analyst call in February. “We continue to monitor the progress from the new management team and remain HOLD until there are clear signs of sales inflection.”

Other longtime watchers were more positive. “Stéphane de La Faverie wasted no time in unveiling his turnaround plan,” wrote D.A. Davidson analyst Linda Bolton Weiser. “The new CEO was not afraid to clearly state the company’s deficiencies.” 

De La Faverie also announced that he was significantly expanding the Profit Recovery and Growth Plan, which he and Jane Lauder, then the chief data officer and executive vice president of marketing and widely reported to be de La Faverie’s main rival for the CEO job, were tasked with executing in 2024. The expansion is focused on three key areas: a more competitive approach to procurement, improving supply chain efficiencies and an expanded organizational restructure that will see the elimination of between 5,800 to 7,000 jobs.

“It felt like a big responsibility, but one I was taking with the support of the board and the family for the long term,” said de La Faverie, when asked what it felt like to announce such a dramatic move in his first outing as CEO.

“As an organization, we experienced tremendous and fast growth, so we built capability ahead of that growth. We saw an organization and the world that was going to continue to have a lot more growth potential than what we are experiencing today,” he continued, ticking off the China slowdown, geopolitical events like the Russia-Ukraine war and the conflict in the Middle East.

“By definition, that created complexity and what I’m trying to do today is remove the complexity and restore agility,” said de La Faverie, “not in the way it was before, but in a way that recognizes the new needs in the world.”

“It’s a big job and not an easy one,” said Renato Semerari, the CEO of Intercos who has known de La Faverie since his days running the Estée Lauder brand from 2016 to 2020. “Big companies, in general, tend to lose their agility and the ability to jump on trends very quickly. Stéphane wants to bring this in and make it an integral part of the strategy. Companies need agility in the decision-making process, in taking accountability, in taking risks. He knows this and is acting on it very quickly.”

The central tenet of de La Faverie’s vision is to make sure the consumer is at the center of every decision made, a major cultural shift for a company that was founded on the premise that distribution defines prestige in the beauty industry. “At the end of the day we are defined by the consumer. We need to move where the consumer is,” he said. “What I’m saying to the teams is where the prestige consumer is and where we can build desirability and equity for our brands — we move.”

Even before he ascended to the corner office, de La Faverie showed a propensity for action. As executive group president overseeing about half of the company’s 25 brands from 2022 to 2024, he  was a key part of the team that  spearheaded the launch of Lauder’s marquee brands on Amazon, a significant move for a company that industry analysts agree was slow to recognize the momentum of the specialty retail channel, particularly in the U.S., and paid the price.

Melis del Rey, general manager of health and beauty at Amazon, recalls a podcast she heard with him in 2020. “Stéphane had bold views about the state of beauty in the pandemic, talking about how this would jump-start a digital revolution in beauty, and how companies would need to adapt how they engage with consumers,” del Rey said. “Back in the day Estée Lauder was not a company thinking digital-first, so this really stood out for me. So when I met him in early 2023, I was like, ‘I know a little bit about your perspective, but I still don’t know if you really mean it.’”

Just one year later, in October of 2024, the Estée Lauder brand launched on Amazon, quickly followed by eight more, including, most recently, The Ordinary. “What stood out for me was Stéphane’s visionary thinking in the context of how important e-commerce was for ELC and how he wanted to learn fast and move fast. He was very willing to experiment and try new things,” said del Rey.

One key move was creating an internal “Amazon center of excellence,” to drive efficiencies of learning and maximize the potential of each brand, pivoting and iterating as new brands onboarded to reflect what was working.

A month into his tenure as CEO, de La Faverie made similar structural moves, unveiling a leaner, flatter leadership model. Lauder’s 24 brands have been organized into category clusters that report to Hudis, and the number of regions has been reduced from seven to four geographic clusters: the Americas; mainland China; Asia-Pacific; and Europe, Middle East and Africa, the U.K. and Ireland and emerging markets grouped into the final one.

“Already this has dramatically simplified business operations — supporting this concept of leaner, faster,” said Jo Dancey, the global brand president of Jo Malone London who was promoted to lead the Lifestyle Fragrance brand cluster consisting of that brand plus Kilian Paris and Editions de Parfums Frédéric Malle. “It’s reinforcing the notion of the consumer being at the heart of everything.

“Before, we had a much more siloed approach,” she continued. “This allows us to play the portfolio in a stronger way — which brands are best for a particular market, who are the consumers for each brand, where is the overlap, the opportunity, the challenge.”   

De La Faverie champions an approach he calls “three-three,” meaning in brand meetings he asks leaders for three things that are working and how they want to scale those, and three things that aren’t where they need help. An avid windsurfer and sky-diver (“before I had children,” he likes to joke), de La Faverie pushes his team to think boldly when they’re answering such questions. He describes himself as “authentic and approachable,” as a leader, but also as someone who is willing to take risks.

“There are some people who need 100 percent of the information to make a decision. There are some who need 80-20. I need 70-30,” he said. “The reason is I believe that the work it takes to go from 70 to 100 is 10 times harder than going from 0 to 70, and it doesn’t really change the outcome.

“I believe that you can fix the plane as you fly it,” said de La Faverie, “and at the speed with which the consumer is moving today, you need to be able to take a certain number of risks and that’s what I’m trying to teach the company.”

It’s a philosophy that has been embraced by the Lauder family — which owns 38 percent of the company’s equity and controls 86 percent of the voting stock — and the board of directors. “The expression I’ve been using is not to ask why, but why not?” said William Lauder. “How do we try new things, constantly experiment, make sure that we’re not leaving anything off the table or limiting ourselves. In a challenging environment like everyone is facing right now, we have to continue to push the envelope, whether it’s new retail formats or new forms of product or packaging or new ways of reaching the consumer. We can’t say, ‘we’ve done that’ or ‘we’re doing fine and we don’t even need to try.’ We need to be trying and experimenting across the board.”

Take Jo Malone London’s recent signing of Tom Hardy to be the face of Cypress & Grapevine Cologne Intense. While the brand is technically a unisex brand, women comprise the majority of its consumer base. “We felt we had a massive untapped opportunity with men, but we needed to make a bold move, so we took the biggest step change in the brand’s history,” said Dancey, noting that Jo Malone has never had a brand ambassador or a paid media model.

The plan worked, with Cypress & Grapevine jumping 40 ranks in less than a year and posting a 200 percent increase in sales, according to Dancy. “Stéphane recognized the opportunity and backed it with investment,” she said. “He pushed us to be bold, and that’s what I’m most excited about as we enter the new era. He knows the direction of the path forward, and equally knows that he needs to energize and push people and he provides the confidence and support to do that.”

Still, it’s one thing to back a great marketing idea, and quite another to reignite the flames of innovation, which once fueled the growth of Lauder’s biggest brands but got stuck on the back burner as the company prioritized a hero product strategy and iterated on classics like Estée Lauder’s Advanced Night Repair, Clinique’s Dramatically Different Moisturizing Lotion and MAC Studio Fix.

“One of the hallmarks of our company is our innovation, our creativity. The key is to build upon the strengths and culture upon which we were founded and modernize the company in ways we can propel it forward,” said Hertzmark Hudis. “There are ways in which we need to be better and faster to market, and more innovative and more surprising in ways that delight our consumer. We have work to do.”

Such a move is mission critical for the company if it hopes to capture Gen Zs and Alphas, a key demographic target in de La Faverie’s plan, but one where Lauder has been losing steam. According to Piper Sandler’s 49th semiannual Teen Survey, released in April, Too Faced dropped three spots to number 10 and MAC fell out of the top 20 altogether in the makeup category and Clinique fell six spots in skin care, while The Ordinary remained number two.

Despite industry chatter that some of Lauder’s brands are tired and out of touch, de La Faverie insists that he is happy with the portfolio, with no plans to divest underperformers like the hair care brands Aveda and Bumble and bumble and the so-called California brands, consisting of Too Faced, Smashbox and Glamglow.

“Our role as a pure play in luxury and prestige beauty is to recruit from mass and elevate the consumer through the pyramid,” said de La Faverie, who also said no acquisitions are currently in the works. “The portfolio we have is perfectly tailored to do that.”

The issue isn’t the brands — it’s the product strategy, he said. “We’ve focused more on retention than acquisition,” said de La Faverie. “We’ve been too dependent on continuing to reinvent what we do best, which is our heroes, but you need to make sure that at the top of the funnel you’re bringing in a lot of new consumers and the consumer wants to see new things today.”

To that end, de La Faverie has committed to tripling the number of innovations the company is bringing to market in the next 12 months, be it commercial innovations that ensure the brands are continually reinforcing their relevance; trend innovations that reflect what’s happening across culture, and breakthrough innovations that tap into advanced science and research from both internal and external partners.

“He has the intention to leverage more the input he can get from people like us,” said Semerari. “He’s very interested in getting the outsider point of view on what is needed and how we would improve certain things and is an open-minded partner who involves us even beyond our normal role. His curiosity to learn more from external partners on what we’re seeing and how we judge certain trends, using us as a source of information to nourish his vision, which is motivating for us and useful for him.”

For example, de La Faverie invited Intercos to a company seminar at Oxford University last year, where he launched a challenge to the brands to bring innovation to market in six to nine months. “We did a project for one of the brands in six months,” said Semerari. “Stéphane doesn’t stay on the theory on what general strategy needs to be. He jumps into action very quickly and this is the pragmatism that’s going to do a lot,” said the Intercos CEO.

De La Faverie, who was toggling between pursuing a career in tech and one in beauty after earning a BA in marketing and communications from INSEAD and an MBA from the Ecole Supérieure de Commerce in France, is also using AI as a force multiplier for innovation. In April, the company announced a new tool that it had developed in conjunction with Microsoft, their second collaboration, called ConsumerIQ to mine data from around the world on key trends, emerging trends and where we are in the life cycle.

“If you want to know what lip color is trending in Oregon, this can tell you,” said de La Faverie, “and then the tool can analyze if we have this product in our portfolio in any of the brands that we can deploy in real time or if we have the claims to support it or if we need to go to R & D and create a product.”

Lauder is also using AI to improve its operational acuity, from expediting safety testing to resource allocation, inventory planning and weighted forecasting. Already the impact of that is being seen on the business. “One of the highlights of the P&L is the fantastic improvement in gross margin — 300 basis points,” said de La Faverie, who gets as animated about operating profit as he does about innovation.

That breadth is one element that makes him unique, say those who work closely with him. “He understands the business end-to-end, starting with the consumer,” said Hertzmark Hudis. “Usually executives are either brand, marketing or innovation or they are commercial, driving. He really has both sides in equal measure and that’s unusual.”

Close friends also describe him as kind and optimistic, with a broad worldview informed by his global experience. “He sees the world from many different points of view, which is important especially now because the world was one, and now all of a sudden it is lots of little satellites,” said his pal Diane von Furstenberg. “Right now what the world  needs is agility and strength and kindness, and he has all three of those characteristics.”

Richard Zannino, lead independent director of the Estée Lauder Cos. board, agreed. “Realizing our ambition to be the world’s most successful consumer-centric prestige beauty company requires an inspirational leader with deep industry expertise, proven brand and business-building acumen, a competitive passion to win, a fresh vision for the future and the courage to drive the needed change to embrace the future,” he said. “The board chose Stéphane to be president and CEO because he is that leader.”

De La Faverie is going to need those characteristics as he grapples with the crisis in China, a problem that is plaguing all of beauty but especially acute for the Estée Lauder Cos., whose business has been slower to recover than its peers. The CEO seems unfazed by the size of the challenge, though, pointing out that China still represents 22 percent of the estimated 1.7 billion people who will be rising into the middle class over the next five years globally.

Lauder’s second-quarter fiscal-year 2025 results trumpeted some recent wins in the region, including Estée Lauder rebounding in makeup, La Mer performing better in skin care and Le Labo and Jo Malone London both improving in fragrance. Still, skin care sales overall declined 12 percent, which the company attributed to the challenges in Asia-Pacific and travel retail, while the makeup category’s 1 percent decline reflected the weakness of the Tom Ford brand in those markets, as well.

“China has rebalanced from being an emerging, fast-growth market to a mature market that is now one of the largest beauty markets in the world with a balance of internal and international brands,” said de La Faverie. “The long-term potential remains strong. We are navigating the current volatility in the system, but great things are happening.”