Coty's Names New CEO -- Update
12 Novembre 2018 - 07:13PM
Dow Jones News
By Jaewon Kang and Kimberly Chin
Cosmetics giant Coty Inc. announced a new chief executive and
switched its chairman, as the company struggles with weak sales and
indigestion from buying dozens of Procter & Gamble Co.'s beauty
brands.
Coty, whose products include OPI nail polish and CoverGirl
makeup, said on Monday that CEO Camillo Pane had resigned,
effective immediately. Mr. Pane, 48 years old, who took over right
after the P&G deal closed in 2016, will be succeeded by Pierre
Laubies, 62, another consumer-goods veteran.
The company's share price is down 50% so far this year and about
half of where it was when it went public in 2013, missing out on a
broad stock market rally.
The company's biggest investor is JAB Holding Co., a European
investment firm that has run Coty since buying the castoff perfume
business from Pfizer Inc. in 1992. JAB is known for deal making but
Coty has choked on its biggest deal, the $12 billion purchase of
P&G beauty brands.
The merger gave Coty more than 40 brands from P&G like
CoverGirl, Max Factor and Clairol to compete better against other
conglomerates, but the acquisition has weighed down the New York
company. Some of the former P&G brands were in worse condition
than Coty anticipated when it agreed to buy them and suffered
further as consumers shifted away from mass-market brands sold in
drugstores.
Last week, Coty reported sales fell 9.2% in its fiscal first
quarter, dragged down by disruptions in the company's supply chain
and a 21% decline in its consumer beauty business, which includes
CoverGirl and Clairol. But Mr. Pane on Wednesday defended its
performance, saying: "If I look at Coty now and if I look at Coty
before the merger, it's been a big upgrade."
In addition to changing its CEO, Coty said Monday it was
switching its chairman. One senior JAB partner, Bart Becht, is
stepping aside as Coty's chairman and being succeeded by another
JAB partner, Peter Harf. The duo have overseen investments in
several consumer companies, including Lysol maker Reckitt
Benckiser, Panera Bread and the maker of Keurig machines. Mr. Becht
will remain on Coty's board.
Like Mr. Pane before him, the new Coty CEO is also from JAB's
stable. Mr. Laubies most recently served as the CEO of Jacobs Douwe
Egberts, a coffee and beverages company created in 2014 when
Mondelez International Inc. combined its coffee business with a
European coffee company controlled by JAB.
Coty, which houses everything from OPI nail polish to Gucci
perfume, has historically relied on acquisitions to boost its size
and reach. But the company is struggling to keep up as the beauty
sector continues to become more crowded and competitive, largely
due to the emergence of indie brands.
While many of its competitors have sought to gain more exposure
to these prestige names, Coty is still largely a maker of
mass-beauty items that represent more than 40% of sales.
More executive change is to come, as Coty is searching for a new
chief financial officer.
Mr. Laubies will serve as a Coty director, effective Wednesday.
Coty also appointed Erhard Schoewel, another former Reckitt
executive, as lead independent director.
Write to Jaewon Kang at jaewon.kang@wsj.com and Kimberly Chin at
kimberly.chin@wsj.com
(END) Dow Jones Newswires
November 12, 2018 12:58 ET (17:58 GMT)
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