INTERNATIONAL - L’Oreal SA is preparing to name its next chief executive officer at a time when consumers around the world see less need to buy pricey perfumes and makeup.
Jean-Paul Agon, who is stepping down next year when he turns 65, said in an interview that the cosmetics giant will announce his successor “pretty soon.” He’d already indicated at June’s annual meeting that the pick would come from within the company.
L’Oreal is looking for “someone who will be able to run this company in unpredictable times,” Agon told Bloomberg TV’s Francine Lacqua on Oct. 5. “L’Oreal is a meritocracy. We are looking for the best of the best.”
It’s a challenging time to take the helm. L’Oreal’s first-half revenue slid 12%, the steepest drop in at least 20 years. Lockdowns and limits to travel have meant fewer occasions to socialize and wear makeup and perfume, lessening the appeal of cosmetics. The company may need to make incremental investments to rebuild or find new directions for some parts of the business, analysts have said.
The stock was little changed Thursday morning and has gained 5.5% this year.
Agon, who joined L’Oreal in 1978, has been CEO since 2006 and chairman since 2011.
Here is a shortlist of CEO candidates:
Nicolas Hieronimus
A L’Oreal veteran, Deputy CEO Nicolas Hieronimus was already being mentioned by analysts as Agon’s probable successor back in 2016. He joined the company in 1987 as product manager and oversaw various businesses including the professional products and luxury units. He is well-known among equity analysts, having taken part in the annual results call for at least five years. Agon himself was deputy CEO before taking the top spot. Hieronimus’s age remains one possible sticking point: He’ll be 57 when Agon retires.
“Hieronimus is the most visible candidate, but if he took over as CEO next year when Agon steps down, he’d be five years older than Agon at the time when he was named CEO in 2006,” said Pierre Tegner, analyst at Oddo. “Historically, L’Oreal CEOs have typically stayed on for well over a decade.”
Stephane Rinderknech
Currently president for North America, Rinderknech, 47, is the epitome of the international markets executive. He spent 13 years in Asia, with stints in Japan and South Korea before running operations in China, the group’s biggest market after the U.S. Like Rinderknech, Agon also ran the US market before being named CEO.
However, “it wouldn’t be the best timing to name Rinderknech CEO, since that could be disruptive for the crucial US market, which is facing challenging times because of Covid-19,” Tegner said.
Barbara Lavernos
The chief technology and operations officer, Lavernos, 52, is in charge of the crucial supply chain for L’Oreal’s 7 billion cosmetics products produced annually. 2020 has been particularly challenging operationally as consumers increasingly turned to e-commerce during lockdowns. The strategy to accelerate online penetration largely rests with her team.
Lubomira Rochet
A relative outsider, Chief Digital Officer Rochet joined L’Oreal only in 2014, but she’s been a rising star and is now part of the executive committee. At 43, Rochet has become a visible face of the company and has taken part in a capital markets day with investors. The Franco-Bulgarian is a trained economist with previous roles at Capgemini SE and Microsoft. Picking Rochet or Lavernos would lend credibility to L’Oreal’s diversity push and signal that it’s serious about making sure women break the glass ceiling at the beauty giant.
BLOOMBERG