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Avon Products appoints J&J exec McCoy as new CEO; Jung to be executive chairman
NEW YORK (AP) ' Avon Products Inc. has tapped Johnson & Johnson executive Sherilyn S. McCoy as its new CEO as the struggling beauty products company looks to regain its past luster.
The announcement Monday ends a four month search. Avon said in December that it was seeking a replacement CEO Andrea Jung, who will remain with the New York company as executive chairman after 12 years as CEO.
The appointment also comes only days after the beauty products maker Coty Inc. announced a $10 billion offer for Avon, which promptly rejected the deal.
Founded in 1886, Avon became a fixture in households across the country as its legions of "Avon ladies" went door to door selling makeup to family, friends and acquaintances. Its brands include Avon Color, Skin-So-Soft and mark.
But North American sales have dropped and its profit has shrunk over the past three years. Avon has frequently missed analysts' earnings expectations and posted weak sales in some of its largest markets, including Brazil and Russia.
The company also faces a bribery probe that began in China and spread elsewhere. The Securities and Exchange Commission is investigating Avon's contact with financial analysts in 2010 and 2011 related to the investigation.
Investors and analysts had blamed Jung for being slow to react to declining results and wrap up the bribery investigation.
Avon is facing outside pressures as well. Last week the company rejected Coty's offer of $23.25 per share for Avon. At the time, that was a 20 percent premium to Avon's previous closing stock price. Avon said the offer was too low.
Coty said it won't pursue a hostile takeover offer.
Expectations will be high when the 53-year-old McCoy becomes Avon's CEO as well as a board member on April 23. McCoy has 30 years of experience with Johnson & Johnson, where she served as vice chairman of the executive committee and a member of the office of the chairman, with responsibility for the pharmaceutical and consumer segments, including brands such as Neutrogena, Aveeno and Lubriderm. Prior to that, she was worldwide chairman of pharmaceuticals.
"Sheri has a unique combination of strategic and finely-honed operational skills, a significant turnaround track record, global experience and people leadership," Fred Hassan, lead director of Avon's board, said in a statement on Monday.
McCoy will report to Avon's board. Her resignation from Johnson & Johnson is effective April 18.
Avon markets its products in more than 100 countries through about 6.4 million independent sales representatives. Its annual revenue is more than $11 billion.
Avon's stock closed at $23.42 on Thursday as the market was not open Friday because of the holiday. That is down about 26 percent from its 52-week high of $31.60 last May and is worth a little more than half of its all-time high of $46.11 in 2004.