After months of media reports citing “people familiar with the talks” and “industry sources” who said Estée Lauder Companies (ELC) planned to sell Too Faced, Dr. Jart+, and Smashbox, the company this week confirmed in an internal communication that it will instead restructure the brands.
Although ELC never publicly confirmed plans to sell the three brands, the conglomerate confirmed the contents of a leaked internal memo to BeautyMatter but declined to comment for this story.
In the memo, President and Chief Executive Officer Stéphane de La Faverie stressed that the three brands have distinct strengths in consumer positioning, competitive dynamics, and growth opportunities, and therefore each requires a tailored business model. The new changes will help the brands “accelerate innovation, strengthen consumer connections, and unlock long-term growth,” de La Faverie wrote. “By adopting the speed, agility, and entrepreneurial mindset of successful beauty indies, we are evolving how we operate.”
In January of this year, ELC corroborated reports that it had hired advisors to review its brand portfolio but did not confirm rumors that it was attempting to sell the three brands as a package deal.
By May of this year, there were reports that ELC had received final bids for the three brands, with one buyer allegedly interested in the package deal and other potential buyers interested in the brands individually. But no deals were made.
De La Faverie’s comments mirror his “Beauty Reimagined” strategic vision, which he introduced last year as part of the company’s Profit Recovery and Growth Plan (PRGP) to restore the company’s sustainable sales growth and achieve stronger profitability. De La Faverie has made it clear since taking the helm in January 2025 that he intends to throw away the legacy script in favor of running the company’s brands in stealth, indie mode.
In May of this year, ELC announced that it had expanded its expected job cuts from its February 2025 estimate of 5,800 to 9,000 to 10,000. On the company’s May 1 earnings call, when asked by Morgan Stanley analyst Dara Mohsenian about the job cuts, once again, de La Faverie hit the same key messages: “When you think about it, and I've said it now consistently over the last few quarters, we're executing the biggest transformation in our company history at every level, leadership, cultural, operational, you name it. And I think we've demonstrated over the last three quarters and actually since the launch of Beauty Reimagined, now the fifth quarter, that we are executing with speed and agility.”
What will “speed and agility” look like for the three brands?
Too Faced will relocate a reduced team from its Los Angeles headquarters to New York to be integrated into ELC’s existing makeup brand cluster, which includes Clinique, MAC Cosmetics, and Bobbi Brown. According to the memo, the brand will lean heavily into targeting Gen Z.
Dr. Jart+ will stay in South Korea with a stealthier, more agile team (read: job reductions) to laser-focus on innovation and specific regions.
Smashbox will stay in Los Angeles with a “significantly streamlined” team (read: job reductions).
The memo also stated that Origins, ELC’s legacy skincare brand popular in the ’90s, will fall under Deciem’s management. Given Deciem’s digital-first success with The Ordinary, one can assume ELC hopes Origins will absorb some of the star power and get a digital, TikTokified makeover.
It will be interesting to see how ELC translates stealth, indie mode for these brands, and if, once evolved, these brands can stand out in an oversaturated market.
