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Cosmetics giant Coty replaces CEO, chairman

Key Points
  • Coty said on Monday Chief Executive Officer Camillo Pane has resigned and will be replaced by Pierre Laubies, the former CEO of Dutch coffee firm Jacobs Douwe Egberts.
  • The Miu Miu Perfume maker also said Chairman Bart Becht would be replaced by company director Peter Harf immediately, without giving details.
  • Coty shares were up nearly 4 percent on Monday afternoon.
Coty CEO Camillo Pane speaks on stage during The DKMS Love Gala 2018 at Cipriani Wall Street on May 2, 2018 in New York City. 
Dimitrios Kambouris | Getty Images

Coty replaced its chief executive officer and chairman on Monday, days after the cosmetics giant rattled investors by warning that fiscal-year performance could be hurt by supply chain issues.

The company said retail industry veteran Pierre Laubies would replace Camillo Pane as its chief executive officer, its fourth CEO in as many years.

Coty Chairman Bart Becht is also ceding the role to fellow director Peter Harf, but will stay on the board.

The new executives are associated with JAB Holding Co, a consumer goods to coffee conglomerate that is the private investment vehicle of Germany's billionaire Reimann family.

Both Harf and Becht run JAB, which has a 39 percent stake in Coty and is also a majority shareholder of Dutch beverage company Jacobs Douwe Egberts, where Laubies was the CEO until December 2017.

The management shakeup comes as Coty struggles to integrate the 41 beauty brands it acquired from Procter & Gamble in 2016.

Last week, the company said supply chain problems from a trucker strike in Brazil, hurricanes in the United States and a warehousing issue in Germany were making it difficult to integrate the brands quickly. It also issued a profit warning that wiped out more than a fifth of its market value.

"(The changes are) not that surprising given the poor performance of the company and the additional supply chain issues that have come about," said D.A. Davidson analyst Linda Bolton Weiser.

Becht had handpicked Pane as Coty's CEO in 2016, but shares have fallen 64 percent since his appointment. Both executives previously worked at Reckitt Benckiser, where Becht once served as CEO.

Jefferies analyst Stephanie Wissink said the degree of senior level leadership changes at Coty over the last two years has been overwhelming.

Coty's new CEO Laubies is likely to face challenges that were similar to those at JDE, which he led for more than four years and was responsible for overhauling a mass coffee brand in a highly competitive market, said Jonathan Feeney, managing partner at research firm Consumer Edge.

"Certainly some of the challenges of the COTY Consumer Beauty business rhyme with those of JDE," Feeney said.

Laubies has also worked at confectionary company Mars Inc and soup maker Campbell Soup. Coty shares were up nearly 4 percent on Monday afternoon.

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