Avon Needs Operational Skills, Vision

Direct beauty merchant chooses its future as it searches for new ceo.

Avon Products Inc., which is looking for a successor for long-time chief executive officer Andrea Jung, needs to find someone who has not only the operational skills to stabilize the firm, according to experts, but also the vision to see its future.

This story first appeared in the December 16, 2011 issue of WWD.  Subscribe Today.

Whomever Avon’s board chooses will determine the future of the company, which is seen on one hand as a beauty firm and on the other as a direct merchant that has expanded dramatically by deploying an army of representatives in developing nations.

“They are in the midst of a turnaround,” said analyst Erin Lash of Morningstar Inc. “It needs to be someone who is able to grasp the issues that are hindering the firm’s results and to be able to have the foresight to put into place plans and directions to get the firm on a more solid footing.”

Lash said the company is already reviewing its operations, but needs to take a step back and also look at the structural issues that have caused problems in markets such as Brazil and Russia.

“The asset-lite model of direct sales is an efficient means to enter into developing markets, given that infrastructure is not necessary for growth,” the analyst said. “[But] the model can almost offer too much flexibility. In emerging and developing markets, the representatives who are selling their products aren’t necessarily exclusively selling those products.”

The future ceo has to also help rally the firm’s representatives, although Jung will be staying on board as executive chairman and has a reputation for working well with the sales force.

“The net could be cast much deeper than the beauty care space,” Lash said.

One name that keeps popping up as someone Avon will likely consider is Mindy Grossman, ceo of HSN, where she oversees a business that operates in multiple channels and has a wide range of products.

Grossman, who could not be reached for comment late Thursday, also served stints at Nike Inc. and Polo Jeans Co.