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What’s Next for Unilever After Reorg, Management Reshuffle

Fernando Fernandez, executive vice president of Latin America, is taking on the newly created role of president of Beauty & Wellbeing, while Fabian Garcia, president of North America, will be heading the Personal Care division.

LONDON — Unilever is losing one of its star managers in the wake of a corporate shakeup and major reorganization that will see the beauty division split into two parts with a continued focus on premium brands and wellness.

Sunny Jain, president of Beauty & Personal Care, one of the most coveted roles at Unilever, is leaving the company to set up an investment fund focused on technology megatrends.

Jain’s role was eliminated as part of the reorganization announced just days after Unilever gave up its controversial pursuit of GlaxoSmithKline’s Consumer Healthcare arm.

Earlier this month, it emerged that Unilever had tabled three, separate multibillion-pound bids for the GSK division, all of which were rejected as GSK said they undervalued the business.

The latest failed bid was valued at 50 billion pounds, and Unilever — under tremendous pressure from shareholders and banks — refused to ramp it up and instead walked away. The takeover would have added brands such as Sensodyne, Advil and Polident to Unilever’s portfolio, but the markets didn’t think acquiring those brands made any sense.

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Unilever shares took a tumble but began to recover once the bid was abandoned. They rose even further after reports that the activist investor Nelson Peltz’s Trian Fund Management took a stake in the corporate giant. Trian and Unilever have both declined to confirm, or comment on the reported investment.

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On Tuesday, after the reorganization was announced, Unilever’s shares closed down 0.1 percent at 39.40 pounds on the London Stock Exchange.

Jain’s role has effectively been split in two in the reorganization led by Alan Jope, Unilever’s embattled chief executive officer. Jope said his aim is to create “a simpler, more category-focused business” around five groups: Beauty & Wellbeing; Personal Care; Home Care; Nutrition, and Ice Cream.

Fernando Fernandez, executive vice president of Latin America, is taking on the newly created role of president of Beauty & Wellbeing, which includes hair care, skin care, as well as vitamins, minerals and supplements, and Unilever Prestige, which includes brands such as Ren, Dermalogica, Kate Somerville and Living Proof.

Fabian Garcia, Unilever’s president of North America, has been appointed president of Personal Care, which encompasses skin cleansing, deodorants and oral care.

James Edwardes Jones of Royal Bank of Canada was underwhelmed by the changes, but pointed out in a report on Tuesday that beauty and wellness remain a priority at the Anglo-Dutch giant, parent of brands ranging from Dove to Ben & Jerry’s.

Edwardes Jones said the new category of Beauty & Wellbeing “highlights that Unilever has retained its ambitions to gain exposure to the consumer health category.”

Going forward, each business group will be responsible and accountable for its own strategy, growth and profit delivery. Jope believes the new structure “will enable us to be more responsive to consumer and channel trends, with crystal-clear accountability for delivery. Growth remains our top priority and these changes will underpin our pursuit of this.”

Alan Jope
Alan Jope Jude Edginton

Following the botched takeover bid, Jope is under increased pressure to sell off slower-growth or “unhealthy” food categories, such as ice cream, and to focus on supercharging high-growth categories, such as beauty and wellness.

Unilever has already gotten rid of its lackluster spreads and tea businesses and is exploring options for a bundle of nonstrategic personal care brands including Q-Tips, Caress, Tigi, Timotei, Impulse and Monsavon. Those brands had combined revenues of around 600 million euros in 2020.

In the first half of fiscal 2021-22, skin care and prestige beauty both grew in the double digits, easily outstripping Unilever’s overall growth of 5.4 percent on an underlying basis to 25.8 billion euros. On a reported basis, sales were broadly flat, edging up 0.3 percent, dented mostly by currency fluctuations.

Sales in the Beauty & Personal Care division, grew 3.3 percent to 10.4 billion euros, with skin care sales rising in the double digits. Vaseline and Ponds brands each saw double-digit growth. The prestige beauty brands also grew in the double digits, due to higher in-store footfall following the easing of lockdowns worldwide.

Unilever said its new organizational model will result in a reduction in senior management roles of around 15 percent, and more junior management roles by 5 percent, equivalent to around 1,500 roles globally.

The company is expected to offer an update on the new structure when it announces its fourth-quarter and full-year results on Feb. 10.

During his short time at Unilever, Jain was buffeted by a series of headwinds — and rose to the challenge.

He shepherded Unilever’s largest and most high-profile division through COVID-19 lockdowns, accelerating the beauty brands’ online offer and ramping up the distribution of Unilever’s health and hygiene products across all markets.

Jain’s moves included getting kids to wash their hands so they wouldn’t spread the virus and marketing deodorants to stay-at-home workers who were no longer breaking a sweat on their way to and from the office.

The company partnered with the British government on products aimed at stopping the spread of COVID-19, and did a campaign with the hair care brand Clear that looked to help customers manage their mental well-being.

“This has always been an industry of hopes and dreams, and my belief is that beauty and personal care is all about translating the hopes and dreams of our consumers, and other stakeholders, into reality,” said Jain, stressing that, pandemic or not, Unilever always has to be “hyper-relevant” to consumers.

A digital whiz and marketeer, Jain had previously worked at Amazon in Seattle and at Procter & Gamble in Canada and the U.S. At Amazon, he was head of the Core Consumables business unit, responsible for health and personal care, beauty and grooming, luxury beauty, grocery/food, baby, private brands, the Pillpack subsidiary and other innovation teams.

He joined Amazon in 2013 from P&G, where he spent more than 16 years working in new business creation, marketing, sales and information technology. Jain joined Unilever in June 2019 and reported to Jope.

Jope has described Jain’s background as “unique” in that it combines consumer goods, online retail and an understanding of the beauty market. “It makes him exceptionally well suited to help us deliver our growth ambitions for our Beauty & Personal Care division,” Jope said in 2019 on revealing Jain’s appointment.