Coverage: Maker of Durex condoms, Scholl foot products losing four execs
Four Reckitt Benckiser Group senior executives are leaving the company, an unusually large exodus when the consumer giant, whose brands include Durex condoms and Scholl foot-care products, is absorbing its biggest-ever acquisition and coping with a series of headwinds.
Thomas Buckley of Bloomberg News had the news:
Reckitt Benckiser Group Plc’s heads of information technology, human resources, marketing, and developing markets will leave in the company’s biggest management changes since Rakesh Kapoor became chief executive officer in 2011.
The departures of the four senior executives, which were confirmed by spokeswoman Patty O’Hayer by email Monday, come at a time when Reckitt Benckiser is trying to become the “undisputed leader in global consumer health and hygiene,” O’Hayer said.
The exit of Darrell Stein, the head of information services, follows a cyberattack that forced the maker of Durex condoms and Cillit Bang cleaners to cut its full-year sales forecast in July due to disruptions in manufacturing and distribution. Reckitt Benckiser also is wrestling with a decline in baby formula sales after paying $16.6 billion for infant nutrition company Mead Johnson.
Stein will be replaced by Seth Cohen, a PepsiCo Inc. executive responsible for information technology operations across Europe and Sub-Saharan Africa. Roberto Funari, RB’s head of marketing, is leaving after recent Scholl footcare product releases failed to entice shoppers, leading to losses at the unit.
Saabira Chaudhuri of The Wall Street Journal reported that the news called the stock to fall 1 percent:
The high number of departures took industry watchers by surprise and spooked investors. Reckitt shares were trading down 1% early Monday.
“RB has typically had low turnover among senior management, for 40% of the executive committee to leave simultaneously is, we believe, essentially unprecedented in recent years,” said Société Générale analyst Iain Simpson.
A person familiar with the matter said the departures were all voluntary, and the timing represents a “confluence of events.”
Reckitt, which makes Durex condoms and Scholl footcare, faces some of the same challenges as its larger peers like Procter & Gamble Co. and Unilever PLC. Consumer tastes and shopping habits have changed dramatically, in many cases dragging on sales in markets around the world.
Reckitt has also been dealing with its own headwinds. Its sales in South Korea were wiped out due to a consumer boycott after its humidifier disinfectant was tied to dozens of deaths and injuries.
Scheherazade Daneshkhu of The Financial Times reported the departures are due to sluggish sales:
The management upheaval comes as Reckitt faces the challenge of absorbing its biggest acquisition yet — the $18bn purchase of Mead Johnson, the US baby milk group — and recovers from June’s crippling cyber attack that prompted a sales warning.
In a statement to the Financial Times, Reckitt confirmed the departures of the heads of IT, human resources, marketing, and developing markets from the 10-member executive committee, headed by chief executive Rakesh Kapoor, one of the UK’s highest-paid industry leaders.
The exodus of so many senior executives from the company, which is headquartered just outside London and has a market value of £52bn, is unusual.
Frederic Larmuseau, head of developing markets, is leaving to become chief executive of Jacobs Douwe Egberts, part of the coffee empire of JAB Holdings, which has a 9 per cent stake in Reckitt. His departure was known inside the company six weeks ago but the exit of the other three vice-presidents was disclosed internally only last week.