Estée Lauder facing new stockholder suit over alleged use of gray markets
A new Southern District of New York lawsuit alleges Estée Lauder retail sales in Asia relied on “a pervasive, prohibited gray market resale industry” and prohibited, duty-free resellers called daigou. One stockholder has sued Estée Lauder’s board in Manhattan federal court on Tuesday over the company’s practices in this market. The plaintiff, Portia McCollum, wants to force the directors to repay Estée Lauder for their alleged misconduct. She’s merely seeking to recoup attorney’s fees and legal costs associated with bringing the action, not a traditional monetary judgment in her favor. The complaint alleges the company’s Asian travel-retail sales channel, a critical growth market for the makeup and perfume house, exploited duty-free tax exemptions. McCollum names 13 current and former directors and officers, including Chairman William P. Lauder of the eponymous family dynasty. The action pleads seven counts, seeking an accounting of salaries, bonuses...