After rejecting a $10 billion takeover bid last week from privately held Coty, Avon (NYSE:AVP) was back in the news Monday morning. This time, the cosmetics company had what it hopes is a more positive development: the naming of Sherilyn S. (Sheri) McCoy as its new CEO. McCoy takes over on April 23 from Andrea Jung, who had last year been moved out of that spot pending the hiring of a new chief exec. Jung is remaining at Avon as executive chairman.
McCoy is a veteran of Johnson & Johnson (NYSE:JNJ), where she was vice chairman of the Pharmaceutical, Consumer, Corporate Office of Science & Technology, and Information Technology divisions. The Avon press release also noted McCoy’s experience in the world that Avon lives in: “Her responsibilities included stewardship for a broad portfolio of world-famous consumer brands including brands such as Neutrogena, Aveeno, Lubriderm, Clean & Clear and ROC.”
McCoy is coming to Avon at a critical time. In addition to the looming possibility of fending off Coty in a follow-up bid or other potential acquirers, she’ll have to continue fighting to right many of Avon’s problem areas. Among them is its famous door-to-door sales force of Avon Ladies. They’re facing stiff competition from all sides, ranging from Internet retailers, department store chains and other retail outlets, to brands like Revlon (NYSE:REV) and Estee Lauder (NYSE:EL).
As InvestorPlace writer Susan Aluise pointed out just last week: “On the company’s last earnings call in February, Jung affirmed the importance of keeping the Avon Ladies happy. Noting that this is a time of tremendous change for Avon, she said her ‘critical priority is providing stability and day-to-day leadership as we continue to motivate and focus our 40,000 associates and our millions of representatives. Their full engagement is essential at this juncture.’”
Investors have given been Avon plenty of slack so far this year, pushing the stock up nearly 30% so far. But the announcement of McCoy as new CEO hasn’t been enough to help Avon buck the downtrend today. The stock is trading at midday 3.2% lower, around $22.67.