Coty Inc. is seeing another change in top management.
Michele Scannavini, who brought stability to the group as chief executive officer after its failed attempt to buy Avon Products Inc. in 2012 and took the beauty firm public a year later, is leaving the company for personal reasons.
Bart Becht, chairman of Coty, will become interim ceo and the search for Scannavini’s successor will begin immediately, the company said. Becht will remain chairman after the ceo search is completed.
Scannavini has relinquished his seat on Coty’s board.
The departure of Scannavini, a 12-year veteran of the beauty company, follows the exit of longtime Coty ceo Bernd Beetz in July 2012. Scannavini, who was president of Coty Prestige at the time, took over from Beetz as group ceo. Beetz stepped down only eight months after Becht arrived as Coty’s chairman and became deeply involved in the Avon bid, taking on the role of public face of Coty, one that Beetz had held for years.
Shares of Coty fell 1.1 percent Monday to $16.74 in New York Stock Exchange trading on the news of another change in ceo within 26 months.
Scannavini, a Procter & Gamble alumnus, worked in executive sales and marketing posts with Ferrari and Maserati and later served as ceo of Italy’s Fila Holding SpA before joining Coty.
“It has been a fantastic ride,” Scannavini wrote in a note sent to business contacts. “Over the last 12 years Coty, developed from being a regional challenger in fragrances to be a global leader in beauty, this thanks to great brands and exceptional people. I feel honored of having been part of it and proud of the contribution I gave all those years to grow Coty bigger and stronger.”
He disclosed no details about the factors behind his decision or his future plans. Sources said his departure wasn’t related to his health.
In a brief conference call to discuss the changes, Patrice de Talhouët, chief financial officer, emphasized the move “is not indicative of any kind of unforeseen problem or financial issue at Coty. We are not revisiting our fiscal 2015 earnings outlook provided in our fourth-quarter earnings release as a result of this event.” He added that no change in strategy is contemplated.
When fourth-quarter results were released on Aug. 28, the company said it was “targeting to return to revenue growth in fiscal 2015 through a competitive innovation program, continuous expansion of the emerging-market business and the progressive recovery in the nail business in North America.” A global efficiency program is expected to deliver annual savings of more than $200 million within the next three years.
In the year ended June 30, revenues fell 2.1 percent, to $4.55 billion from $4.65 billion, with an 11 percent decline in the Americas region, to $1.7 billion, offsetting a gain of 5.2 percent in Europe, the Middle East and Africa, to $2.3 billion, and a virtually flat performance in the Asia-Pacific region, where sales totaled $544.9 million. The firm incurred a net loss of $97.4 million, versus net income of $168 million in the prior year. However, excluding asset impairment and other charges, the company posted a non-GAAP profit of $316.2 million, down 2.2 percent from $323.2 million in the prior year.
“Michele has been a material part and key contributor to Coty’s success of the past decade,” Becht said. “We would like to thank him in particular for taking Coty public through a listing on the New York Stock Exchange and developing a clear strategy for Coty’s future.”
The company derived 55 percent of its sales last year, or $2.5 billion, from fragrances, with color cosmetics accounting for 30 percent and skin and body care for 15 percent. During his tenure, Beetz orchestrated acquisitions, including Philosophy and OPI, which helped lessen the company’s dependence on fragrances, which accounted for 60 percent of sales in 2009.
Becht, also a P&G veteran, joined Coty’s board as chairman in 2011. For 12 years prior to that, he was ceo of Reckitt Benckiser plc, a global consumer goods company. JAB Holdings II BV, the investment vehicle of Germany’s billionaire Reimann family, was a leading seller of shares in Coty’s IPO. It retains an interest in Reckitt Benckiser and owns Jimmy Choo, Bally and Belstaff. Jimmy Choo is preparing for an October IPO of about a quarter of its shares that would value the British footwear brand at more than 700 million pounds, or $1.14 billion at current exchange.