Avon CEO McCoy will leave the company
LONDON (AP) - Avon's CEO will leave the company in March as the struggling beauty products maker continues a turnaround campaign.
Sheri McCoy has led the company for five years and sits on the board, but there has been some external pressure from activist investors for a change in leadership.
Avon said Thursday that it has hired an executive search firm to help find McCoy's successor.
"The platform is in place for a new CEO to continue accelerating the pace of change and take Avon to sustainable profitable growth," McCoy said in a company release.
Barrington Capital Group had been pushing for significant action at Avon since 2015, when it sent a letter saying that, "significant, immediate changes in leadership and strategic direction are needed."
In March 2016 Avon announced that it was cutting 2,500 jobs.
Avon Products Inc. launched a three-year transformation plan last year and so far it has sold its North American business to private investment firm Cerberus Capital Management and realized $180 million in cost savings. But those efforts have been arduous.
The company on Thursday swung to a surprise loss of $45.5 million in the second quarter.
Shopping habits have shifted dramatically, enough to jolt the iconic American brand dating back to 1886, which moved its headquarters from New York to the U.K. last year.
Sales have declined every year since 2012, and fell 8 percent in 2016. The company has fewer "Avon Ladies" going door-to-door every quarter.
It has been beset by software problems, a commission system that it's been trying to improve under McCoy, and a delayed entry into e-commerce that put it behind competitors.
Industry analysts who follow the company did not see many signs of the turnaround effort now underway.
"Overall we believe challenges are accelerating, with visibility lacking," wrote Mark Astrachan, an analyst with Stifel Nicolaus. "We believe Avon continues to lose share and consumer relevance in a number of key markets, increasing the difficulty in achieving a sustainable improvement in sales growth and operating margin, particularly given worsening sales trends while reinvestment increases."
Shares slumped 10 percent in midday trading Thursday to trade near three-year lows.