When Stéphane Rinderknech was named chairman and chief executive of the perfumes and cosmetics division at LVMH in March, it was an expected appointment. Rinderknech joined the French luxury group a year earlier ostensibly to lead its hospitality division, but the executive was a beauty veteran, having spent 18 years in senior roles at L’Oréal. To say his departure was a blow to the world’s biggest beauty company is an understatement: As the conglomerate’s former president of North America and CEO of L’Oréal USA, Rinderknech was even seen as a candidate to one day run it all.
L’Oreal isn’t taking its loss lying down. For the last year, it and LVMH have been embroiled in a legal battle over Rinderknech’s appointment. In 2022, L’Oréal filed suit in French court against LVMH claiming the executive breached the terms of his non-competition clause. The court first sided with L’Oréal, but LVMH appealed the decision and won. L’Oréal filed a subsequent appeal earlier this year, which is ongoing.
L’Oréal representatives said the case is still pending. LVMH declined to comment.
As luxury conglomerates like LVMH, Kering and Puig look to supercharge their beauty businesses, fights over talent are likely to become more common. With new pathways for top beauty talent, a class of executives is looking to trade up. Take Raffaella Cornaggia, who spent 14 years at various positions with the Estée Lauder Companies, with earlier stops at Chanel and L’Oréal, before joining Kering Beauté as its CEO, or Giulio Bergamaschi, the CEO of Acqua di Parma, who previously worked at L’Oreal for 18 years.
Kering is clearly ready to pay top dollar to establish a foothold in a category that up until this point has been licensed out. Puig, too, is focused on increasing market share, and as a private company, faces little pressure from investors on spending. And with scale on its side, LVMH is able to outspend competitors for talent.
“If you’ve made a beautiful product campaign 15 times, what next?” said Véronique Le Bansais, partner and managing director of luxury consulting firm MAD. “Whether you are at Lauder or L’Oréal, there are people there that have the entrepreneurial mindset and are ready for a change.”
The Appeal of Luxury
Until recently, top beauty executives were more likely to leave for start-ups or PE-backed brands. Coty executive Andrew Stanleick, credited with CoverGirl’s turnaround and global CEO of the company’s joint venture with Kylie Cosmetics and KKW, went to the SPAC-backed skin care and technology company Beauty Health, the parent of HydraFacial, in 2022.
Kering, Puig and LVMH, with fast-evolving beauty strategies, offer the stability and compensation of a big, established company but often the transformational growth opportunities of a new business as well.
“In the past, bigger beauty players in the executive shopping market couldn’t afford to leave,” said Martin Kartin, principal of his namesake executive search firm, which works with beauty brands like K18, Supergoop and Bluemercury. “Now … talent can say to Lauder and L’Oreal and Shiseido, ‘I can make the bucks that I want and it’s more entrepreneurial.’”
Senior executives often sign non-compete clauses. But companies like LVMH and Kering can poach talent to work in other categories, such as fashion or spirits. Like Rinderknech, Bergamaschi first joined LVMH in a non-beauty role at Loro Piana before switching over.
The Talent Most In Demand
Simply having a blue-chip name on one’s resume is not enough for recruiters to come calling. As a race to balance wholesale distribution with owned retail stores and e-commerce sites grows tighter, luxury companies are looking for leaders with strong track records of showcasing digital transformation or expertise in luxury clienteling to replicate what competitors like Chanel Beauty and Dior Beauty have done .
According to Le Bansais, most top-tier talents have similar skills when it comes to product development, wholesale distribution and brand marketing, but “the shift to DTC puts more pressure on bringing people in and connecting them to your brand,” she said.
Certainly, a new definition of luxury beauty has upended the status quo. Brands like Byredo, Aesop and Creed are challenging what a direct connection to customers can look like, which is one reason why big conglomerates are ready to invest top dollar in acquiring, staffing and expanding them.
Prospective recruits also have to showcase growth strategies, international experience and M&A capabilities, said Caroline Pill, partner at Heidrick & Struggles, but more importantly, be known as an inspirational leader, one who can attract exciting and desirable candidates as a business grows.
It’s too early to tell what further poaching will occur as Puig, LVMH and Kering invest further in their beauty enterprises (though Kering is actively recruiting), but beauty-centric conglomerates need to rethink their structures in order to protect brand strategies and trade secrets.
“More and more companies are losing high-potential and promising executives because of the hierarchies they have put in place,” Kartin said.
For instance, it’s the norm for pure-play beauty companies to have five-plus executive vice presidents who all receive similar stock options and comparable salaries, he said. In those environments, it may be more difficult for C-suite and HR to create new or more flexible roles with added responsibilities or benefits. But modernizing corporate structures by ditching long-standing silos and other considerations should be warranted for high performers for retention. Damian Chiam, partner at Burō Talent, agreed that seasoned talent would likely both be the most sought-after and on the lookout for their next career move.
Still, legacy beauty companies have something to offer Millennial and Gen-Z talent, primarily brand and division rotations that offer broad career progression and experience. Experts believe being an early hire at a new establishment like Kering Beauté could be too good of an opportunity to pass up, no matter the level — even with a better counter offer.
“Staying or leaving is not necessarily about the money — it’s a question of power, of doing something greater and going up the pyramid,” said Le Bansais. “Driving year-on-year growth isn’t enough anymore. It’s about finding a role to conduct successful change and having a trophy.”