The acquisition will add more than 300 products to L’Oreal’s lineup.
Andrea Jung will continue as chairman, but give up her CEO duties.
Avon Products Inc. plans to separate the roles of chairman and CEO next year and Andrea Jung, Avon’s current chairman and CEO, will be named executive chairman, giving up her post as CEO.
The health and beauty products company’s board of directors and Jung will conduct an external search for a CEO. She will continue to serve in both roles through the search process and transition period, the company says. Jung has been Avon’s CEO since 1999.
“Over the past 12 years we have transformed the business from a decentralized group of local operating entities to a globally managed business in over 100 countries with global brands and a global operating model,” Jung says. Avon is No. 30 in the Internet Retailer Top 500 Guide and largely sells through independent direct sales representatives.
“In the process, revenues have more than doubled, and the number of representatives has doubled as well,” Jung says. “As we look to the future, Avon’s business model remains advantaged, with both the beauty and direct selling industries growing around the world, and with our broad, geographic footprint. A new CEO will provide a fresh lens and additional operational and executive leadership.”
Separating the chairman and CEO roles as well as strengthening overall management capabilities are key steps in helping the company capture future opportunities, says Fred Hassan, managing director and partner, Warburg Pincus LLC, and Avon’s lead independent director. “The board looks forward to continuing to work closely with Andrea and the new CEO to put the company back on a growth track.”
Avon does not break out e-commerce sales, but for the third quarter of fiscal 2011 did report:
- Total sales were $2.76 billion, up by about 5.7% from $2.61 billion in the prior year quarter.
- Net income was $165 million, down by 1.2% from net income of $167 million.
For the first nine months:
- Total sales were $8.25 billion, up by about 7.2% from $7.69 billion through the first three quarters of 2010.
- Net income was $514.0 million, an increase of about 36.4% from net income of $376.8 million in the same period of 2010.
As executive chairman Jung will work with the new CEO on Avon’s strategic direction and brand positioning, she says. She will continue to be involved with motivating the company’s millions of representatives and as an advocate on behalf of the Avon Foundation for Women. The foundation has raised and awarded $860 million to causes that help improve women’s lives, she says.
Avon markets to women in more than 100 countries through approximately 6.5 million active independent Avon sales representatives, the company says.