January 11, 2019 / 4:13 PM / 10 months ago

Coty makes changes to top management amid supply chain issues

(Reuters) - Coty Inc announced a major management shakeup on Friday, two months after appointing a new chief executive officer, as it grapples with supply chain issues that could weigh on its business.

The company appointed Luc Volatier to head its global supply chain and named Pierre-André Terisse new chief financial officer on Friday.

Coty last year warned that its full-year performance would be hit by supply chain disruptions from a trucker strike in Brazil, hurricanes in the Unites States and a warehousing issue in Germany.

The warning pushed down the company’s stock in 2018, resulting in a 67 percent decline for the year. Shares rose as much as 2.2 percent to $7.35 in early trading on Friday.

Coty said on Friday it also appointed Gianni Pieraccioni as chief operating officer of its consumer beauty division, which includes brands acquired from Procter & Gamble in 2016.

The consumer beauty division has been struggling to boost sales amid intense competition for shelf space in beauty aisles at retailers.

“I will assume personal responsibility for the Consumer Beauty division so that I can oversee the continuing transformation of this business,” CEO Laubies said in a statement.

The division, a key revenue generator, has seen its sales fall in the last two quarters and the trend is expected to continue into the quarter ended December, according to Refinitiv’s IBES.

“ (The management change) is understandable given the performance of the (consumer beauty) division,” Berenberg analyst Rosie Edwards said.

The management shakeup comes just eight weeks after Coty abruptly changed its chief executive officer - handing the reins to Laubies who replaced Camillo Pane.

Laubies was previously CEO of coffee company JDE, which was owned by JAB Holding Co, a consumer goods conglomerate. JAB is the biggest shareholder of Coty.

“Coty’s new CEO Pierre Laubies is clearly taking the reins and addressing Coty’s biggest near-term challenges by announcing several leadership changes,” Wells Fargo Securities’ analyst Joe Lachky said in a note.

Terisse replaces Patrice de Talhouët, who quit last year, while Volatier replaces Mario Reis.

(GRAPHIC: Coty stock performance in 2018 - tmsnrt.rs/2SOwKMR0

Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli

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