Sherilyn McCoy hasn’t even been the CEO of Avon Products for a full week and she’s already right in the middle of a potential takeover of the company by fellow beauty-product manufacturer Coty, Inc., an offer that had shareholders excited before Avon nixed the bid.
Coty sent another letter over to Avon on Wednesday that said that it would love to end the stalemate between the two companies and it's more keen than ever to buy the company, according to a press release issued by Avon.
McCoy, a former Johnson & Johnson exec, is hardly getting a chance to ease into her new role. The previous CEO of the company, Andrea Jung, had been in that spot for a dozen years, apparently asked to be replaced, CNN reports. It’s no wonder. Even with Reese Witherspoon as a brand ambassador, the wobbly company’s stock has plummeted 27% since the start of 2010.
"The fact that they've been able to attract someone of (McCoy’s) caliber answers one of the questions investors had, which is would a new CEO have the full authority needed to make changes," said Connie Maneaty, an analyst at BMO Capital Markets, to CNN.
However good McCoy may be, she will certainly be tested as a leader early and often with Avon. Not only is the company in financial trouble and Coty persistently ringing its doorbell, Avon “is also involved in two Securities and Exchange Commission investigations, including one related to Avon employees allegedly bribing foreign officials and the second for allegedly improperly providing information to analysts,” CNN notes.
In a call with investors, McCoy didn’t sound like she was just to going to be sitting around waiting for Coty’s next offer. "The most important thing is to really get out and understand the operating model and understand where people are, the regional teams, and then come back with a better perspective on what makes sense to be able to drive for the future,” she said, according to CNBC. “Obviously the organization has undergone some significant changes. And so I think what we need to be focused on is, how do we stabilize, making sure that people are clear around their accountabilities.”
So investors are understandably confused as to whether Avon Ladies will be changing uniforms soon or if they’ll be carrying their products in the same old bags. They should know their answer soon enough.