Estée Lauder is split by succession rift as heirs battle over the troubled beauty brand's future after its shares plunged 50% this year

Heirs to the Estée Lauder fortune are battling for the future of the troubled beauty company, after the firm's shares plunged more than 50 percent this year, according to a new report.

The Lauder family owns roughly 35 percent of the company named for the clan's matriarch, including supervoting shares that give the heirs roughly 80 percent of the power.

Key family members include Estée's sons Leonard and Ronald, as well as third-generation heirs William, Jane, Aerin. Leonard's son Gary, who had not been involved with the business, also joined the board on Friday.

According to the Wall Street Journal, the family is split on its support for current CEO Fabrizio Freda, who is leading a turnaround plan focused on reducing a backlog of unsold inventory.

Leonard, who recently stepped down from the board at age 90, is dissatisfied with Freda, while his 63-year-old son William, who led the company from 2004 to 2009, strongly backs the current CEO, sources told the Journal.

Ronald's daughter Jane, from the other side of the family, is on a shortlist of internal CEO contenders to replace Freda, some of the people said. 

In statements to DailyMail.com, the Lauder family denied any rifts and expressed confidence in Freda, who succeeded William as CEO in 2009.

William, on behalf of the family, said: 'Together, we have a deep commitment to, passion for and responsibility to the legacy and the future of this company.

'As we have demonstrated throughout our 77-year history, as a family-controlled company we remain committed and dedicated to ensuring The Estee Lauder Companies continues to grow and thrive for decades to come. 

'We have full confidence in Fabrizio's leadership and believe in his strategic vision and steadfast focus on the future.' 

Leonard in his own statement said: 'As I shared with our global employees in August, I believe in the success of our Company because we have the right leadership in William and Fabrizio. 

'I am confident The Estée Lauder Companies is in good hands. We have the best brands and the best people, and William and Fabrizio's skillful and thoughtful management will take us into the future.' 

Board member Charlene Barshefsky added: 'The Board of Directors has confidence in Fabrizio and strongly supports his profit recovery plan. The Company is taking the necessary measures to address near-term performance and drive future growth.' 

Since Freda took over as CEO in July 2009, Estée Lauder stock has surged from under $20 to above $300 in 2021, before its recent tumble down to below $125, according to the Journal.

So far this year, the stock is down more than 51 percent, wiping some $45 billion off the company's market capitalization.

Competitors have fared better, including French giant L'Oréal, whose shares are up nearly 30 percent this year.

Analysts cite a number of factors weighing on Estée Lauder, including its dependence on China, where pandemic disruptions severely impacted sales.

The company also remains dependent on department stores, and some of its brands have been slow to embrace TikTok to reach younger customers.

Freda and his management team have reportedly been briefing the board on a turnaround strategy, which focuses on clearing out unsold inventory. 

The embattled CEO has set inventory goals for late March and late June that will be key tests of his standing with the family and shareholders, according to the Journal.

In an interview with the Journal in August, Freda said the past year had been challenging for the company, but said he remained confident about his position as CEO: 'I don't plan to go anywhere, we're in the midst of a very important turnaround plan.'