Investors seemed to cheer the imminent departure of Avon Products Inc. Chief Executive Andrea Jung, causing shares to spike amid news that the cosmetics giant was looking for a new leader.
Alhough Jung will continue in her role as chairman, Avon said Tuesday that she will relinquish the chief executive post -– a position she has held since 1999 -– once a replacement is found.
Avon shares rose 82 cents, or 5.1%, to $16.96 on Wednesday. But that’s down 40% from a year earlier, when the stock closed at $28.10. The New York cosmetics company is famed for its roughly 6.5 million “Avon lady” sales representatives, who sell makeup door to door in more than 100 countries.
But the company has struggled recently. Its third quarter net income slipped 1.4% to $165.2 million amid difficulties in key markets such as Brazil. Avon is also being investigated by the Securities and Exchange Commission for what may have been improper relationships with financial analysts.
Jung will continue as both chief executive and chairman while working with the Avon board to find her successor. The Princeton graduate currently sits on several corporate boards, including Apple Inc., General Electric Co. and the New York Stock Exchange.
“Consumer uncertainty amidst a volatile macroeconomic environment across several of our markets further pressured revenue growth,” Jung said in a statement when Avon released its quarterly earnings in October. “In light of the changing landscape, we are assessing our long-range business plan.”
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