Revlon Inc. named Fabian Garcia as its next chief executive officer, turning to a Colgate-Palmolive Co. veteran to revamp the cosmetics company.
Garcia, 56, will take the reins on April 15 and serve on Revlon’s board, the New York-based company said in a statement Monday. Investors reacted coolly to the move, which may have tamped down speculation that Revlon will be a takeover target. The stock declined 3.8 per cent on the news.
Garcia joins Revlon at an unsettled moment for the seller of makeup, hair-care products and fragrances. After a 19 per cent stock decline last year, top Revlon backer MacAndrews & Forbes said in January that it was considering "strategic alternatives" for the business. The investment firm, run by billionaire Ron Perelman, owns 78 per cent of Revlon.
The January news sent the shares up 12 per cent in a single day, with investors betting that the company would be acquired. Monday’s CEO announcement, which signaled that Revlon was looking to overhaul the company on its own, erased much of that rally. The stock fell to $34.64 in New York on Monday.
Perelman said in Monday’s statement that Garcia had shown a track record of success driving sales and profits at Colgate. "He has the global strategic, marketing, sales, financial and operational leadership experience to successfully lead Revlon into the future," he said. Garcia also worked at Timberland Co., where he managed international operations.
Revlon’s last CEO, Lorenzo Delpani, stepped down on March 1, citing personal reasons. He stayed on as a paid adviser and board member.
Perelman gained control of Revlon in 1985 using cash raised with the help of former junk-bond chief Michael Milken. He sought to take the cosmetics maker private in 2009, prompting a lawsuit from other investors that he later agreed to settle.
In recent years, Revlon has worked to revive growth. Sales of some of its larger brands had slowed, and Revlon pulled out of China about two years ago. It’s sought to find new areas of expansion by acquiring Colomer Group, a deal that brought it Creative Nail professional and Shellac nail polishes.
The company’s most recent quarterly results were strong, helping bolster the stock in February. Sales gained 4.2 per cent to $521.9 million in the fourth quarter.
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