P&G's Freda to head Estee Lauder
NEW YORK Estee Lauder announced on Friday that Procter & Gamble executive Fabrizio Freda will join the company as president and chief operating officer, and it is anticipated that Freda will become chief executive officer within 24 months—a move that at least one industry observer believes could lead to expansion into mass beauty or new distribution channels as the boundaries between mass and prestige increasingly blur.
“We believe investors will react favorably to Estee Lauder’s chief executive officer succession plan. Despite the obvious risks, the appointment of an outsider with mass consumer goods experience implies significant and necessary change is likely,” stated Morgan Stanley analyst William Pecoriello in a research note.
The move is part of a succession plan created by Estee Lauder chief executive officer William Lauder, who will step down in two years.
Until recently Freda served as president of global snacks at P&G. At P&G he spent a decade in positions of increasingly responsibility in the health and beauty care division. Freda also directed marketing and strategic planning for Gucci SpA from 1986 to 1988.
Reporting to Freda in his role as president and chief operating officer will be many of the company’s key global brands, including Clinique, as well as the specialty brands such as Bobbi Brown, La Mer, Jo Malone, Darphin and the Aramis and Designer Fragrances divisions, which will continue to be led by group president Patrick Bousquet-Chavanne; the company’s international business, which accounts for more than 50 percent of sales, under the continuing direction of group president international, Cedric Prouve; global operations; research and development; and packaging.
As part of the plan, chief operating officer Dan Brestle will be named vice chairman and president, ELC North America. In this newly created role, Brestle will continue to oversee the Estee Lauder, MAC, Prescriptives and Tom Ford Beauty brands, which will continue to be led by group president John Demsey and the BeautyBank division on a worldwide basis.
“Although Dan Brestle’s focus on NA could be a positive, will he stay?” stated Pecoriello. “Will the discipline Freda imposes, based on 23 years at P&G, lead to a more structured environment for the personalities that drive the fastest growing brands like MAC?”
In addition, group president Philip Shearer will take on new responsibilities, leading the strategy and new business team, and focusing on mergers and acquisitions. He will continue to lead the Aveda, Origins, Bumble and bumble and Ojon brands, as well as the online business.