Avon's Turn-around Story Closes a Another Chapter

Andrew Klips |

As part of its transition to new leadership, Avon Products (AVP) said Friday that executive chairman and board of directors member Andrea Jung is stepping-down from her positions at the end of 2012. She will remain a part of the door-to-door cosmetics seller’s team in an advisory capacity.

Jung, 54, became the first woman CEO of Avon in 1999 and held that position until resigning last December. She is currently a member of the board for both GE (GE) and Apple (AAPL).



She was replaced as Avon chief executive by Johnson & Johnson executive Sherilyn S. McCoy in April. Fred Hassan, who joined Avon in 1999 and currently serves as lead independent director, will be become non-executive chairman of the board.

Hassan is presently a partner and managing director at private equity firm Warburg Pincus and previously was the Chief Executive Officer at Schering-Plough Corp. Merck & Co. (MRK) acquired Schering-Plough in 2009 in a $41.1 billion merger.

Avon is looking to be a turn-around story as it has been under tremendous pressure related to three straight years of declining profit, a rejected takeover attempt from Coty, Inc. and a federal probe for allegations of bribing foreign officials. With a background in marketing, not operations, Jung was perhaps not equipped with the tools to deal with the plethora of challenges. In August the company released earnings showing a 70 percent plummet in sales and tightening margins, citing lower demand globally for its makeup and skin-care products.

The market is apparently viewing the move as a step in the right direction for the company. Shares have been treading water around $16 for the four months, but have surged ahead to above $17 per share in morning trading.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
GE General Electric Co 17.65 -0.06 -0.34 58,171,204 Trade
AAPL Apple Inc. 172.67 3.30 1.95 35,269,743 Trade
FICO Fair Isaac Corproation 155.56 -1.75 -1.11 104,597 Trade
AVP Avon Products Inc. 1.98 -0.10 -4.81 4,266,778 Trade
MRK Merck & Company Inc. (new) 56.34 0.77 1.39 9,769,466 Trade

Comments

Emerging Growth

AfterMaster Inc

Studio One Media Inc is a diversified media and technology company. It is engaged in the development and commercialization of proprietary, edge audio and video technologies for professional and consumer…

Private Markets

Voleo

Voleo is a free download that allows you to form investment clubs with your friends, family, colleagues, classmates, teammates…basically anyone you know and trust. Invest and manage a stock portfolio…

The Green Organic Dutchman

The Green Organic Dutchman Ltd. ("TGOD") produces farm grown, organic cannabis for medical use. The company grows its high quality organic cannabis in small batches using craft growing, all natural…