He was the "Golden Boy" of prestige beauty for over a decade. Honestly, if you looked at the Estée Lauder Companies (ELC) around 2018, you’d see a juggernaut that seemed untouchable. At the center of it all was Fabrizio Freda, the Italian-born executive who took a family-led legacy and turned it into a global, data-driven powerhouse.
But things have changed. A lot.
In late 2024, the announcement finally dropped: Fabrizio Freda is retiring. Specifically, he’s stepping down as CEO at the end of the 2025 fiscal year (June 30, 2025). For many in the industry, it wasn't a surprise, but it still felt like the end of a massive chapter. We aren't just talking about a guy leaving a job; we’re talking about the man who basically architected the modern luxury beauty market.
The Rise of the Freda Strategy
When Freda arrived from Procter & Gamble in 2008, Estée Lauder was a different beast. It was prestigious, sure, but it was also a bit slow. It relied heavily on department stores—those "beauty counters" your mom used to visit. Freda changed that. He pushed the company into what he called "multiple engines of growth."
Basically, he didn't want the company to just rely on one brand or one country. He went all-in on China. He went all-in on Skin Care. And for a long time, it worked beautifully. Between 2009 and the early 2020s, the stock price didn't just grow; it skyrocketed. Freda was the CEO who knew how to balance the "magic" of a creative beauty brand with the "math" of a global supply chain.
What Really Happened with Fabrizio Freda and Estée Lauder?
You can't talk about Freda without talking about the "China Wall." For years, China was the company's biggest win. The middle class there couldn't get enough of La Mer and Clinique. But then, the world broke.
Post-pandemic recovery didn't look like anyone expected. While the U.S. and Europe bounced back, the Chinese market stayed sluggish. This is where the narrative around Fabrizio Freda and Estée Lauder started to shift from "unstoppable growth" to "strategic reset."
The "Daigou" problem was a huge part of this. For the uninitiated, daigou are basically personal shoppers who buy luxury goods abroad (often at duty-free shops in Korea or Hainan) and resell them in mainland China to avoid taxes. It was a massive, "unstructured" market. When the Chinese government cracked down on this and travel retail tanked, Estée Lauder’s sales followed.
- Net sales dropped about 2% to $15.61 billion in fiscal 2024.
- Earnings were cut in half.
- The stock price, which once flirted with $370, tumbled toward the double digits.
Critics started asking: Did Freda lean too hard on China? Was the company too slow to pivot when the "Daigou" era ended? It’s a classic case of a strategy working too well until it doesn't.
The Succession Drama
For a while, everyone was guessing who would take over. Would it be a Lauder family member? Jane Lauder was a big name in the rumor mill. But in a move that signaled a desire for stability and internal continuity, the board chose Stéphane de La Faverie.
Stéphane takes the reins on January 1, 2025. Freda isn't just vanishing, though. He’s staying on as an advisor through fiscal year 2026 to make sure the "Profit Recovery and Growth Plan" actually sticks. This plan is Freda’s parting gift—or his final challenge. It involves cutting costs (including a 5% workforce reduction) and trying to reignite the "prestige" feel that some feel the brand lost during the volume-heavy years.
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What Most People Get Wrong
A lot of people think Freda’s exit is a "firing" in disguise because of the stock price. That’s a bit too simple. You have to remember he’s 66 years old and has been at the helm for 16 years. In the world of S&P 500 CEOs, that’s an eternity. Most guys don't last eight years, let alone sixteen.
He’s also the guy who bought The Ordinary (Deciem) and Tom Ford Fashion. He saw that "prestige" was moving away from old-school luxury toward "scientific" beauty and high-end fragrances. Without those acquisitions, ELC would be in much worse shape today.
Actionable Insights for Investors and Industry Watchers
If you’re watching this transition, here is what actually matters for the next 18 months:
1. Watch the Inventory rebalancing.
The biggest drag on the company hasn't been "bad products"—it’s been too much stuff sitting in the wrong places (mostly Asian travel retail). If de La Faverie can clear the pipes by mid-2025, the margins will look a lot better.
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2. The Amazon Pivot.
Under Freda’s final months, the company finally caved and put Clinique and The Ordinary on Amazon’s Premium Beauty store. This is a massive shift from the "we only sell in high-end malls" philosophy. Keep an eye on those sales numbers; they might be the growth engine that replaces the China gap.
3. The "Advisor" Role.
Freda staying on as an advisor until 2026 is a double-edged sword. It provides stability, but it can also make it hard for the new CEO to truly change course. Watch for how much autonomy Stéphane de La Faverie actually gets in his first 100 days.
4. Diversification beyond China.
The "Strategy Reset" Freda launched in early 2025 is focused on EMEA (Europe, Middle East, Africa) and the Americas. The goal is to make sure the company is never again this vulnerable to a single country’s economic mood.
The legacy of Fabrizio Freda is complicated. He built a skyscraper, but he also had to deal with the foundation shaking at the very end. Whether he’s remembered as the man who modernized Lauder or the man who stayed too long will depend entirely on how well his successor executes the "Profit Recovery and Growth Plan" he left behind.
To track the progress of this transition, your best bet is to follow the quarterly earnings calls throughout 2025. Specifically, look for "organic net sales growth" excluding the Asia travel retail segment. That’s the real indicator of whether the core brands are still healthy. Also, keep an eye on the integration of the Tom Ford brand, as this represents the company's biggest bet on a "luxury lifestyle" ecosystem beyond just creams and lipsticks.