Coty names P&G’s Strobel as interim chief; Nabi to leave company

By Rishabh Jaiswal, Alexander Marrow and Mrinmay Dey

Dec 22 (Reuters) – Coty named Procter & Gamble veteran Markus Strobel chairman and interim CEO on Monday, handing him the reins at a time when the CoverGirl parent battles pressure on its mass-market business and a steep slide in its share price.

Coty shares have fallen more than 50% this year as the company struggles to revive sales amid intensifying competition from newer beauty brands. Paris-listed shares of the company were down about 5%, while the U.S. shares were untraded before the bell on Monday. 

Strobel, who spent more than three decades at Procter & Gamble and most recently led its global skin and personal care division, will take over from Sue Nabi, who is stepping down after five years as CEO, the company said.

The move adds Coty to a long list of global consumer companies that have made leadership changes as they navigate an increasingly divergent spending pattern. The company did not say when it expects to name a permanent chief.

Strobel, who has previously worked with labels like Gucci, Dolce & Gabbana, Valentino and Hugo Boss, takes charge on January 1.

He would also become executive chairman of the board, succeeding Peter Harf, who is retiring from Coty’s board after more than three decades. Earlier this year, Harf retired as chair and managing partner of Europe’s JAB Holding.

A person familiar with the matter told Reuters that an active search for a permanent CEO is underway. The source added that the appointment of a new chair created a natural moment for leadership succession across the board.

CONTROLLING SHAREHOLDER MAKES A PUSH FOR LEADERSHIP CHANGE

The Financial Times reported earlier this month that Coty’s controlling shareholder, JAB Holding, was planning a leadership overhaul at the company, which would first lead to the exit of board chair Harf, and a new chair would soon find a replacement for Nabi.

JAB, which has assets under management worth more than $40 billion, holds about 52% of Coty, according to data compiled by LSEG.

It did not immediately respond to a Reuters request after Coty’s statement.

BRANDS UNDER SCANNER

Coty reiterated that it had launched a strategic review of its consumer beauty business, adding that Strobel would have the “full support of the board.”

In September, the New York-based Coty launched a strategic review of its consumer beauty business that could lead to the sale of brands such as CoverGirl and Rimmel, as it planned to focus on its more profitable fragrances unit.

“I see tremendous potential to accelerate growth, strengthen our position in prestige and mass beauty, and deliver sustainable value for shareholders, partners, and consumers worldwide,” Strobel said.

However, the company’s troubles were more a result of increased competitiveness and the recent deceleration in the beauty market, which would continue to erode Coty’s sales despite any leadership changes, CFRA Research analyst Ana Garcia had said previously.

The company fell short of first-quarter profit estimates as retailers scaled back orders amid persistent macroeconomic and tariff uncertainty. Still, it projected second-quarter like-for-like sales at the upper end of its previous forecast, banking on steady demand for Calvin Klein and Hugo Boss fragrances.

CONSUMER COMPANIES OVERHAULING TOP RANKS

Consumer goods companies are swapping chief executives almost as quickly as sports teams change coaches as boards grow impatient with weak growth, U.S. tariff uncertainty and the challenge of attracting younger shoppers.

Kraft Heinz has tapped industry veteran and former Kellogg chief Steve Cahillane as its new CEO, marking the latest leadership shift among household brands this year.

Coca-Cola and yoga apparel maker Lululemon have also named new chiefs, joining peers such as Unilever and Nestle in reshuffling top management.

(Reporting by Rishabh Jaiswal and Mrinmay Dey in Bengaluru and Alexander Marrow; Editing by Harikrishnan Nair, Nivedita Bhattacharjee and Anil D’Silva)