CEO Sheri McCoy will quit next year. The company was under pressure from activist investor Barington Capital. Fred Katayama reports.
Avon falling. Shares of the pioneer in direct sales plummeted Thursday on news Sheri McCoy is stepping down as CEO amid pressure from Barington Capital. The activist investor had renewed its call for her ouster after Avon reported a surprise loss in the March quarter. Chris Wang of Runnymede Capital Management: SOUNDBITE: CHRIS WANG, RESEARCH DIRECTOR, RUNNYMEDE CAPITAL MANAGEMENT, (ENGLISH) SAYING: "One negative is that she's staying on until March, so you still have a lot of uncertainty, yeah, for the next three or four quarters." The latest development comes as Avon embarks on a restructuring drive. It has been losing sales representatives. And it's losing sales to bigger players like Estee Lauder and niche brands. The company is half of the size of what it was five years ago after selling most of its U.S. business. In the latest quarter, the company surprised Wall Street by posting a loss instead of a profit, and revenue fell. The company now expects revenue growth to meet the bottom end of its full-year forecast.