NEW YORK, Mon, Feb. 18, 2013 — Investors bought everything Avon Products Inc. CEO Sheri McCoy was selling last week, lifting shares 23 percent on the back of solid results and a confidence the new CEO has a turnaround plan.
That makes the spotlight even brighter on McCoy when she takes center stage on Thursday at an important industry analyst conference and details that turnaround. Among her biggest challenges: fix the company’s technology problems, and help the sales representatives generate more cash.
“She has to start speaking with specificity,” said Kathy Gersch, a co-founder of Kotter International, which helps companies implement strategies and whose clients include Coty Inc., a smaller rival that tried to buy Avon last year.
“It’s not just about fixing the company anymore. It’s about moving the company into the future.”
So far, McCoy and finance chief Kimberly Ross, have taken early steps to cut costs, stanch an exodus of representatives in top markets like Brazil and Russia, and start talks with U.S. officials to settle a costly overseas bribery probe.
Wall Street gives McCoy and Ross kudos for being frank about the depth of Avon’s problems and for taking tough steps like cutting 1,500 jobs in December as part of plan to save $400 million in costs a year by 2015; and exiting Vietnam and South Korea where it is too far behind rivals.
The quarterly performance turned in on Tuesday showed some of that progress, cheering investors who had become disappointed by the broken promises in the later years of the tenure of Andrea Jung, McCoy’s predecessor.