Avon Products Inc will search for a new CEO next year to replace Andrea Jung (鍾彬嫻) as the world’s biggest door-to-door cosmetics seller grapples with slowing sales growth and possible bribery-law violations overseas.
Jung, 53, who has run the company since 1999, will remain chairwoman and will work with the board to recruit a replacement, the 125-year-old company said in a statement on Tuesday.
Avon, based in New York, is shaking up the executive suite amid slowing sales and profit growth as consumers confront unemployment and an economic expansion that has trailed forecasts.
Jung said in October that she would update investors on the company’s growth plans in the first quarter of next year. Net income in the third quarter fell to US$164.2 million, or US$0.38 a share, from US$166.7 million, or US$0.38, a year earlier. Analysts projected US$0.46 a share, on average. It is the fourth time in five quarters that profit trailed analysts’ projections.
Total sales, excluding fluctuations in currency prices, rose 1 percent in the quarter. Avon said it no longer expects to meet its forecast for sales growth this year.
Jung recommended splitting the CEO and chairman roles “to better address the company’s scale and opportunities,” said Jennifer Vargas, an Avon spokeswoman.
Jung is stepping aside as Avon investigates potential Foreign Corrupt Practices Act violations, which led to the firing of four executives over bribes to officials in China. Avon said on Oct. 27 in a regulatory filing that the US Securities and Exchange Commission had begun to look into the cosmetics company’s actions as well.
Avon generates more than 80 percent of its revenue overseas.
Avon shares rose 5.6 percent to US$17.05 in New York on Tuesday. Through Monday, Avon shares had declined 43 percent this year.