Beauty products seller Avon Products said Friday that its chairman and former CEO Andrea Jung will step down at the end of the year, ending her 18-year tenure at the company.
Jung will be replaced as chairman by lead director Fred Hassan. Hassan joined the board in 1999 and has served as lead independent director since 2009. He is a managing partner at private equity firm Warburg Pincus and a former chairman and CEO of pharmaceutical company Schering-Plough Corp.
Jung will continue to be an adviser to the board. She joined Avon in 1994 and became the first woman CEO for the 126-year-old company in 1999. But she came under fire for failing to stem the company's declines and wrap up a bribery investigation.
She was replaced as CEO by Johnson & Johnson executive Sherilyn S. McCoy in April but retained her chairman title. Jung said her move to step down as chairman signals the CEO transition is complete.
The timing makes sense because McCoy had no experience in cosmetics or direct selling when she came aboard, so Jung was needed to bring her up to speed, Citi Investment Research analyst Wendy Nicholson said in a note to investors.
"Today's news is a step in the right direction in terms of Avon moving past its legacy issues and we think investors should be happy that this chapter is now closed for Avon," she wrote.
Avon, whose products include Skin So Soft lotion and Mark makeup, has struggled for years to turn around its results at home and in emerging markets. In August the company said its second-quarter net income fell 70 percent, hurt by the stronger dollar and lower demand globally for its makeup and skin-care products.
Meanwhile, it is dealing with a bribery probe. The problems began in 2008, when it started to investigate possible bribery in China related to travel, entertainment and other expenses, and soon widened the probe to other countries, with the Securities and Exchange Commission and Justice department getting involved.
In September, the SEC decided it wouldn't recommend any action against the company over whether Avon contacted analysts inappropriately during a separate bribery investigation. But it still faces wider probes about possible bribery in China and other countries.