Andrea Jung, the longest serving female CEO at a major American corporation, has been let go from Avon. This week, the cosmetic 125-year-old global cosmetic company announced that she will be replaced as chief executive: Avon's Andrea Jung loses CEO title.The company has an annual revenue of over $10 billion and operations in more than a hundred countries. But its share price has tumbled 45% this year. So Jung, who has run Avon since 1999, got the boot. She will remain with the company as chairman:
Avon Products Inc., the global beauty company, said it has begun a search to replace chief executive Andrea Jung, who will remain as chairman. Jung has attracted the ire of investors because of slumping sales and a federal probe about whether the company broke bribery laws overseas.I guess investors were cool with it. Upon news that Jung had been ousted, shares rose nearly 10%: Avon's stock jumps as CEO is shoved aside.
Jung will be named executive chairman beginning in the new year, Avon said Tuesday, adding that Jung will work with the board to find a replacement.
"The stock has been cut in half this year," Ali Dibadj, analyst at Sanford C. Bernstein, said. "The trust between investors and management has been severed. There have been a few times where expectations have been laid out there and have not been met."
Avon in October said that the Securities and Exchange Commission was investigating the company's contact during 2010 and 2011 with certain analysts and other representatives of the financial community. The company also reported third-quarter profit that fell below analyst expectations, with Brazil weighing on earnings as the result of implementation of a new computer system, while tough economic conditions also hurt sales in other markets.