* Names two co-CEOs to replace outgoing CEO Guerra
* Chairman to play stronger role, have final say
* CFO becomes co-CEO, headhunting for other one
By Valentina Za
MILAN, Sep 1 Italy's Luxottica
overhauled its top management structure on Monday after Chief
Executive Andrea Guerra left due to rifts with Chairman Leonardo
Del Vecchio, now set to play a more active role at the eyewear
The 79-year-old Del Vecchio, who owns 61 percent of the
company he founded in 1961, should help ensure a smooth
transition after Guerra's successful 10-year-long mandate. But
investors say management succession needs to be addressed.
The maker of Ray-Ban sunglasses named 53-year-old Enrico
Cavatorta, current chief financial officer and general manager,
as co-chief executive. It is recruiting externally for another
co-CEO who Cavatorta said could be in place by year end.
The co-CEOs will be part of an executive committee that will
be led by the chairman and include, at least initially, a senior
executive in charge mainly of production.
Some analysts are wary of this more complex governance model
though there are examples, such as Swiss luxury group Richemont
, of companies successfully managed by two co-CEOs.
"While we believe that Enrico Cavatorta is a manager of
quality second to none, we remain nonetheless sceptical that
this new structure will enhance corporate governance at
Luxottica," Citi analysts said in a note.
"We doubt that three chiefs will be better than one, as
eventually someone has to make the strategic decisions."
Cavatorta, who has been CFO since 1999 when he arrived from
scooter maker Piaggio, said Del Vecchio's role was to
make sure any differences of opinion between the two CEOs did
not paralyse the company.
"If the two get along well of course his presence will be
less and less necessary," Cavatorta told a press conference.
Under Guerra, 49, sales at Luxottica more than doubled to
7.3 billion euros, boosted in part by acquisitions, making it
the world's biggest eyewear group. He will net 11.4 million
euros on top of the regular severance pay, the group said.
Cavatorta told a press conference the strategy would not
change and acquisitions, especially in emerging markets, would
continue to be on the agenda. However, there would be a stronger
focus on cost cuts and profit margins.
"The company will continue to be what it has always been. We
hope for a solid (revenue) growth of at least 7 percent per
year," Del Vecchio told reporters.
He added his ideas on Luxottica's future had clashed with
those of Guerra. "I have some projects, he had other projects.
Clearly we did not share the same view," he said.
Rumours that Guerra was leaving after falling out with Del
Vecchio surfaced two weeks ago, and Luxottica said then the two
had been debating the group's future strategy for some time.
Shares initially fell but have since recovered with analysts
forecasting a strong second half for Luxottica as a weaker U.S.
dollar will boost sales in North America, which account for 56
percent of the total.
"The dollar is finally helping and this is reason enough to
hold onto the stock," said Roberto Lottici, a fund manager at
"Del Vecchio founded the group, knows it and cares about it.
The succession issue is very clear to him and it wouldn't
surprise me if recent events were setting the stage for this
problem to be sorted out in one way or another," he added.
A source familiar with Del Vecchio's thinking said it should
not be ruled out that in the future his eldest son could replace
him as chairman of Luxottica.
Claudio Del Vecchio, 57, one of Del Vecchio's six children,
is currently chief executive of U.S. clothing group Brooks
Brothers and non-executive board member at Luxottica.
(additional reporting by Sabina Suzzi, Stephen Jewkes and
Silvia Aloisi, editing by David Evans and Cynthia Osterman)