Long string of poor performance – missing analysts' estimates; unable to fix operational problems.
Didn't groom successor; so board went with Sherilyn McCoy, JNJ Vice-Chairman.
Marketing capabilities in a company that needs operational skills to get back on track (like Carly Fiorina). And no COO since 2006.
Rejected $10.7 billion offer from Coty (Avon mkt value in 2004 was $21 billion; today $6 billion).
Forced to step down as CEO in 2011; now as Chair end Dec 2012 (1 year earlier than planned).
Weak board that enjoyed working with celebrity CEO. When fired as CEO, kept her as Chair. When announced resignation at Chair, has contract to stay as senior advisor. Cushy.
Stock at $14.50, down 18% on year.
Q3 earnings down 81%. China sales down 31%. Dividend cut 74%.
The U.S. Justice Department, Securities and Exchange Commission and Avon's board are looking into possible violations of the Foreign Corrupt Practices Act, which bars bribery of foreign officials to get or keep business. Avon disclosed the probes in October 2011.
In 2011 Avon spent $93 million investigating the bribery scandal. $300m already in legal expenses.