We will continue to evolve this portfolio

In the third quarter of its fiscal year, Estée Lauder saw its net income fall by 70 to $ 27.2 million. Quarterly sales fell by 10 to 1.7 billion. These past months, the new leader already laid the foundation of its strategy to transform this specialist multi-brand high cosmetics of range in a multinational integrated and efficient. To better compete with its major competitors as l ' Oréal and Procter & Gamble, it will also stimulate innovation, while specialists argue that Estée Lauder to be asleep on his laurels his last years. In February, Estée Lauder has announced a vast reorganization that will result in the removal of 6 of its workforce, or 2,000 positions. In his first interview as President and CEO, Fabrizio Freda explains the "echoes" a new vision of the group for the years to come.

What is the impact of the crisis on the activity of Estée Lauder

The overall decrease in consumption, the broad movement of destocking in the distributors around the world and the currency fluctuations have caused a slowdown in the market of cosmetics. However, in this economic downturn, we have recorded good performance in the specialized distribution networks and we won shares of the market in the world. Especially in care for the skin and makeup products. Geographically, we continued our strong growth in Asia, in emerging countries (China, Russia...) and even in Europe where, in particular, the British market has been boosted by the weakness of the pound. On the other hand, we are very affected in perfumes, especially in the United States.

How do you change the U.S. market

The US market, which represents 40 of our sales, no doubt hit the bottom. The phenomenon of removal ends, but we expect not rebound until the situation is stabilized on the employment front. We expect therefore no significant improvement in the coming twelve months.

In France, how is your activity

In a France of cosmetics in contraction, we gained market share. Here, Estée Lauder ranks in third place are taken into account only the skin care and makeup. If it includes perfumes, we are fifth. The France is part of our first ten markets and we want to take the best ideas to innovate. Since July 1, we have also installed our European headquarters in Paris.

What is the impact of the crisis on prices

The price should not be deeply affected by the crisis, but the consumer will be more attentive to the value to the quality-performance-price ratio. We are really at a time conducive to very high prices simply justified by the status of the mark. This is probably why that the very high-quality suffers more than other segments. On the more affordable products, quality to even raise prices. We must therefore learn to better communicate the quality of our products. Should better advise clients, because cream for example may cost more expensive to purchase, but not on the duration, to use, it is adapted to a specific skin. In the United States, there is also that consumers appreciate now that prices are displayed in department stores. Before, it was seen as prestigious. This is no longer the case.

Do you not have a broad portfolio of brands

Clinic and Mac, the least expensive, to the sea, very high, we have today a broad and balanced portfolio. Thus, we are present on all segments excluding products for the mass market on which we do not intend to go. This is not so much the number of marks that could pose problem than the individual performance of such or such. Can add or remove some. We will continue to evolve this portfolio. We have an incubator in which we create trademarks in the United States. We will be on the same template open in Asia and Europe to rise to trademark vocation to be internationalised in the next five years.

But are you not too small

Non. We are the world leader in luxury beauty products. The size in our competitive environment, when you exclude the "mass market", is very sufficient, with a turnover of $ 7.5 billion. In addition, we continue to grow more aggressively with our expansion into Europe and Asia. There are very many areas in which we can double our market share in ten years.

Can you grow profitable

The fact to be backed by a family (43.4 of the capital and 87.6 of the voting rights, Editor's note) we with a corporate culture very strong and allows us to have a long-term vision. But beyond a necessary program of savings of $ 450 million over three years, we have already announced and that we're in oe work, we must also make an effort in terms of organization to be more globally integrated. With our 29 brands in 140 countries, each developing independently, we were too duplicate costs and not enough advantage of economies of scale. We have also invest in studies on consumers to better understand the demand of our clients. This will enable us to better adapt to the expectations in different countries. We must finally take good ideas everywhere where they are and meet internationalize them. We have the energy, the critical mass and lines of progression. We need to give us the strength to reinvest in our priorities.

Should you not accelerate selling you or through a major acquisitionEstée Lauder is not need to be sold or merged. Can rely on our own strengths and partnerships as in research and development, or designers in perfumes. In terms of acquisitions, our strategy is rather to buy small or medium-sized marks very promising, performing in a country, but we can accelerate global growth. With the crisis, prices fall and we could explore some opportunities.