Estée Lauder Calls Off Brand Sell-Off, Pivots to Restructuring

Following the collapse of its high-profile merger talks with Puig, The Estée Lauder Companies (ELC) has officially called off its plans to divest several key brands.

On July 13, a major shift occurred regarding the rumored sale of Too Faced, Smashbox, and Dr. Jart+. An internal memo revealed that Estée Lauder decided to keep Too Faced, Smashbox, and Dr. Jart+ under its corporate umbrella, opting instead for a series of targeted operational restructurings.

In tandem, Origins—a skincare brand currently battling brand aging and retail counter closures—will also undergo a major shakeup with a refreshed leadership team.

Stéphane de La Faverie, CEO of The Estée Lauder Companies, acknowledged in the memo that over the past year, the group had evaluated various strategic options for these brands, including internal optimization and external divestment.

"Our brands have distinct identities and target different consumer demographics, requiring tailored operating models," de La Faverie stated in the memo. "We will learn from the agility, speed, and innovative mindset of independent, emerging beauty brands to modernize our overall corporate operating system."

Internal Restructuring After Canceled Divestments

According to the internal memo, ELC's decision to halt the sales and pivot toward internal restructuring involves four key strategic adjustments:

1. Too Faced will relocate its headquarters from Los Angeles to New York. Targeting Gen Z consumers, the brand will significantly streamline its team and integrate into ELC's existing makeup cluster, operating in synergy with brands like Bobbi Brown and MAC.
2. Smashbox, the professional makeup brand founded by a Hollywood makeup artist, will remain in Los Angeles but will undergo substantial team streamlining and downsizing.

3. Dr. Jart+ will maintain its local operating structure in South Korea.
4. Origins will be handed over to the management team of Deciem, the parent company of The Ordinary. This move is highly likely aimed at leveraging Deciem's digital-first operational expertise to revitalize the brand.

Staffing adjustments and layoffs are expected across these brands, though specific numbers have not been disclosed.

For leadership, Too Faced has yet to announce a new brand manager. Lisa Sequino, who took over as President of ELC's Makeup Brand Cluster in May 2025, will oversee the brand's operations. Meanwhile, LinkedIn profiles show that Ye Jin Kim has served as Global Brand Creative Vice President for Dr. Jart+ for over four years.

Why did ELC halt the sale and choose internal restructuring instead?

The answer likely lies in the challenging six-month sales process.

In November 2025, rumors surfaced that ELC was looking to sell Dr. Jart+, a brand it acquired at a valuation of $1.7 billion.

By January 2026, reports emerged that Too Faced, Smashbox, and Dr. Jart+ were being bundled together for a heavily discounted fire sale, with rumored price tags ranging from just $300 million to $500 million.

In March 2026, a South Korean private equity fund reportedly expressed interest in acquiring Dr. Jart+ individually for 200 billion KRW (approximately $150 million)—representing a staggering drop to just 8% of its original acquisition valuation.

Throughout this period, institutional investors showed little interest in acquiring the brands as a package. The lack of attractive offers, valuation collapses, and a dry M&A market likely forced ELC to halt the divestment.

At the same time, analysts suggest that keeping the brands prevents ELC from realizing massive financial losses, and indicates that the group is starting to regain its footing following a series of reforms under its new leadership.

Ongoing Challenges and Strategic Pivots

This has not been the only deal to fall through for ELC recently. In May 2026, its massive merger talks with Puig collapsed unexpectedly, reportedly due to disagreements over high equity valuations tied to Charlotte Tilbury.

With the divestment of Too Faced, Smashbox, and Dr. Jart+ now off the table, ELC has seen two major capital maneuvers reverse course in just a few months.

Originally, ELC could have used the proceeds from selling these brands to acquire faster-growing, more relevant beauty assets. The collapse of these agreements indicates that the company is taking a highly disciplined, financially viable approach to M&A.

Under its "Profit Recovery and Growth Plan," ELC aims to innovate products and channels, increase investment in high-potential brands, and optimize overall operational efficiency.

Meanwhile, ELC is still executing a massive global layoff plan. The projected job cuts have escalated from initial estimates of 2,600 and 3,200 to 5,800–7,000, and finally reached a planned 9,000 to 10,000 positions as of June 2026. Restructuring charges have also ballooned, with approved cumulative pre-tax restructuring costs reaching approximately $1.748 billion.

The decision to retain and restructure these brands, accompanied by team downsizing, is a continuation of ELC's broader global organizational restructuring and cost-cutting efforts.

In the highly competitive global beauty market, ELC faces intense external pressure. For instance, L'Oréal Group recently acquired Kering Beauté (valued at a staggering €4 billion) and brought the Gucci Beauty license under its direct control a year ahead of schedule, expanding its luxury beauty footprint.

In contrast, following the failed Puig merger and the canceled brand sales, ELC's strategic focus has been forced to shift from asset monetization to internal stabilization and damage control.

While the strategic pivot may be correct, turning around a giant corporate ship takes time and comes with growing pains. For ELC, Dr. Jart+, Too Faced, and Smashbox, calling off the sale is only the beginning of a long journey to redefine their future.