UPDATE 4-Avon's Jung to leave board early; new CEO in spotlight

* Jung to stay on as a senior advisor through April 2014

* Fred Hassan to become non-executive chairman in January

* Move shows transition moving ahead under McCoy-analysts

* Shares close up 7.2 percent

(Updates with closing share price)

By Jessica Wohl and Phil Wahba

Oct 5 (Reuters) - Avon Products Inc will close thebook on the Andrea Jung era at the end of the year, clearing theway for new Chief Executive Sheri McCoy to try to fix the iconicbut struggling beauty products company.

Jung, whom McCoy replaced as CEO in April, will step down asexecutive chairman and board member on Dec. 31, more than a yearearly, and stay on as a senior adviser, the company said onFriday.

Jung will no longer be a looming presence in the board roomas McCoy tries to put in a place a strategy she is stilldeveloping to turn around the world's largest direct seller ofcosmetics, whose sales have slid in key markets and which istrying to settle a U.S. bribery probe.

Avon shares closed up 7.2 percent at $17.39 on the New YorkStock Exchange.

"Jung's exit marks the end of the transition to the newmanagement team at Avon, which should be positively received bythe market," said Atlantic Equities analyst Victoria Collin.

Fred Hassan, a well regarded turnaround expert and dealmakerwho is lead independent director at Avon, will becomenon-executive chairman on Jan. 1.

Hassan, who has been on Avon's board since 1999, is also amanaging director and partner at private equity firm WarburgPincus. He was chairman and CEO of Schering-Plough Corp from2003 until 2009.

But investors are focused on former Johnson & Johnson

executive McCoy and await her plan for fixing Avon.

Jung was pushed out of the CEO post after a number of majormistakes, ranging from several botched restructurings, dwindlingprofitability and a probe into whether Avon officials broke U.S.bribery laws overseas as the company sought to develop newmarkets.

In the first six months of McCoy's tenure, Avon has beguntalks to settle the bribery investigation, which has costhundreds of millions, and hired a new top lawyer.

In August, after Avon reported another poor quarter, McCoysaid her priorities were to stabilize revenue, rein in costs andmake the job of a sales representative more attractive. She didnot say when she would announce a new strategic plan.

In April, Avon said Jung would be its executive chairman fortwo years. Instead, she will assume the senior advisor role onJan. 1, and her contract for that position will run throughApril 2014, the company said on Friday.

Wall Street and Avon shareholders had severely criticizedJung and the board she oversaw for letting the company'sproblems fester and for what some saw as a lack of seriousconsideration of a $10 billion unsolicited takeover bid thisyear by smaller rival Coty Inc.

Some analysts hope Friday's news means further changes tothe board are in the offing.

"I think changing several members of the board at Avon isthe right thing to do, especially after their awkward dealing -or lack thereof - with Coty," said Sanford Bernstein analyst AliDibadj. "My sense is that this is just the start of more movesthere."

In April, Avon named former Campbell Soup Co CEODoug Conant to the board.

Several board members have been directors since before Jungtook the reins, including Hassan, former Time Inc CEO Ann Moore,Stern Group Chairman Paula Stern and Yankee Hill CapitalManagement Managing Director Lawrence Weinbach.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic on Avon's share price and key events: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> REIGN OF TUMULT

Jung, 54, joined Avon in January 1994 as president ofproduct marketing for Avon U.S. after holding key positions atcompanies like luxury retailer Neiman Marcus Group. A boardmember since 1998, she became CEO in 1999 and was a big draw forAvon's army of direct sales representatives, many of whom likedto see a successful, glamorous woman at the top of the company.

One of the highest-profile women in U.S. business, Jung wasin the Top 10 of Fortune Magazine's 50 Most Powerful Women inBusiness list from 2007 through 2010.

Her popularity was one reason Avon had given last year forkeeping Jung on as an executive chairman after her stint as CEO.

The company's international sales grew by leaps and boundsin the first years of her tenure. But things later soured, asproblems like an exodus of U.S. sales representativesaccelerated and more recently, as sales started to shrink inRussia, China and Brazil, the fastest-growing markets for beautymarkets.

Still, Jung was one of the most prominent U.S. CEOs andcontinues to sit on the boards of Apple Inc and GeneralElectric Co .

Jung will maintain her base salary of $1 million and othercompensation and benefits, a spokeswoman said.

(Reporting by Jessica Wohl, Brad Dorfman and Phil Wahba inChicago; Editing by Gerald E. McCormick, Lisa Von Ahn andRichard Chang)


Messaging: jessica.wohl.thomsonreuters.com@reuters.net))

Keywords: AVON JUNG/