The company has announced that Jung will continue to serve as Chairman and CEO during the recruitment process, and will assume her new title once the new CEO appointment is confirmed.
A committee comprising a board of directors will work together with Jung in the external recruitment process for the new CEO position, which Avon says has been created in an effort to streamline the executive board and in response to its growth.
Jung has overseen unprecedented growth at Avon
"Over the past twelve years we have transformed the business from a decentralized group of local operating entities to a globally-managed business in over 100 countries with global brands and a global operating model. In the process, revenues have more than doubled, and the number of Representatives has doubled as well,” said Jung.
"As we look to the future, Avon's business model remains advantaged, with both the Beauty and Direct Selling industries growing around the world, and with our broad, geographic footprint. A new CEO will provide a fresh lens and additional operational and executive leadership."
During her 12 years at the helm of the company Jung has overseen a series of restructuring and expansion programs that has given way to unprecedented growth. In line with this the number of direct sales representatives now stands at around six million worldwide
Bribery scandal and falling profits
However, the explanation for the executive board reshuffle contradicts early news reports of Jung’s new job role, which some publications have viewed as reducing her influence and power within the company.
So far 2011 has been a difficult year for Avon, with profits hit by rising costs and distribution problems in the all-important Brazil market, difficulties that have been further compounded by investigation into bribery by executives in the company’s China division.
The company reported that dollar sales for its most recent third quarter were up by 1 percent to $2.8bn, while income from continuing operations was slightly down at $164.2m – a figure that was hit by continuing weakness in developed markets and further impacted by logistical problems Brazil.
These problems have weighed heavily on the company’s share price, resulting in stock prices plummeting at an alarming rate, leaving some investment analysts wondering if the company could become a target of a hostile take-over bid.