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UPDATE 1-Activist fund Barington calls for Avon CEO search
May 4, 2017 / 10:36 PM / in 7 months

UPDATE 1-Activist fund Barington calls for Avon CEO search

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By Michael Flaherty and Gayathree Ganesan

May 4 (Reuters) - Activist investor Barington Capital renewed its pressure on cosmetics maker Avon Products Inc , calling on the company to search for a new chief executive.

Barington said on Thursday that Avon’s shares have suffered under Chief Executive Sheri McCoy and that the company needs “the right leadership in place” to recover its position as a leading beauty brand.

The company’s shares have lost nearly 80 percent of their value since McCoy took charge as CEO in 2012.

In March last year, Avon agreed to give Barington Capital the right to approve the appointment of an independent director, in a bid to avoid a proxy fight with the activist fund.

As part of the deal, the Barington nominee was to be jointly selected by Avon and its top investor Cerberus Capital Management, which bought a majority of Avon’s North America business early last year.

New York-based Barington owned 2.8 million shares of Avon worth $14.5 million as of Dec. 31, according to a regulatory filing.

Avon, which has a market value of $1.59 billion, on Thursday reported a surprise first-quarter loss partly due to higher bad debt expense, mainly in Brazil. (Reporting by Michael Flaherty in New York and Gayathree Ganesan in Bengaluru; Editing by Lisa Shumaker and Maju Samuel)

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