Hershey says CEO to retire at year-end
LOS ANGELES (Reuters) - Chocolate maker Hershey Co (HSY.N), which has been losing sales to M&Ms maker Mars Inc, said on Monday its president, chief executive and chairman, Richard Lenny, will retire at the end of the year.
The news comes as the maker of Hershey Kisses and Reese's Pieces struggles with rising dairy costs and stiff competition and amid speculation it may be considering a tie-up with Britain's Cadbury Schweppes Plc (CBRY.L)
Hershey spokesman Kirk Saville said the board of directors learned of Lenny's decision to retire over the weekend. When asked about the reason for his departure, Saville said Lenny, 55, felt that after 6-1/2 years as CEO, it was the right time to turn the company over to new management.
The board has begun a search for a successor, the company said, adding that it expected to make an announcement "in the near future."
Lenny has served as CEO since March 2001 and was named chairman in December of that year.
He joined the Hershey, Pennsylvania, company from Kraft Foods Inc (KFT.N), where he headed its Nabisco biscuit and snacks unit.
During the early part of Lenny's tenure, the company benefited from a focus on new, more profitable products, such as caramel-filled Kisses and a line of fancy cookies that have built on the success of its existing chocolate brands.
Lenny was also at the helm five years ago, when the Hershey Trust agreed for the company to be bought by Wm Wrigley Jr Co WWY.N, but pulled it off the market in September 2002 following opposition from Pennsylvania officials and community groups, who feared plant closures and job losses.
"When Lenny went to Hershey they had some issues and he really rejuvenated the business and brought in a lot of talent, and then the whole Wrigley thing happened," said Ken Harris, principal at consulting firm Cannondale Associates. "He hung in there, he could have bailed after that. He was able to hold his team intact and I think that said something."
Hershey's roots date back to 1894. The Hershey Trust exercises voting rights on behalf of the Milton Hershey School Trust, for which it has been a trustee since 1909.
In August, a Deutsche Bank analyst said the Hershey Trust was possibly reconsidering its position regarding a sale of the company, given the weak performance. The trust's chairman, however, said at the time it was committed to maintaining control of the chocolate maker.
The comments followed Wall Street rumors that the company could be considering combining with Cadbury, which plans to separate its confectionery unit from its drinks division. Cadbury's products include Dairy Milk chocolate and both Trident and Dentyne chewing gum.
Hershey Trust officials were not immediately available on Monday to comment on Lenny's impending departure.
For the last year, rising dairy costs and stiff competition from MasterFoods USA, a unit of privately held Mars Inc., have hampered results at Hershey, which has not been keeping pace in the fast-growing premium chocolate market.
Hershey shares fell to $47.25 after closing at $47.41 on the New York Stock Exchange, up $1. The company's stock is down about 4.8 percent so far this year but has gained about 50 percent since Lenny was named CEO in 2001. Continued...
