Ulta Beauty, one of the world’s leading salon hair providers has announced the departure of Chuck Rubin, president and CEO, sending stock prices tumbling.
The company said that Rubin will be leaving the company on February 21st, and confirmed that Dennis Eck will be appointed as interim CEO while a suitable replacement is considered.
Rubin is leaving to take up the position of CEO at Michaels Stores, a US retailer specializing in arts and crafts, and has agreed that he will help the company during the transition period to the newly appointed CEO.
Although Ulta made a specific reference in its official announcement that Rubin’s departure did not relate to any dispute, news of the resignation and the short notice period meant investors reacted negatively to the news.
Stock prices fall 12 percent on the news
Stocks fell by nearly 12 percent to $87.80 last Thursday, the day of the announcement and have not rebounded, suggesting that the investment world was concerned that the company needs to find someone of Rubin’s caliber to replace him.
A number of financial analysts had given the thumbs down to Rubin’s departure, a consencus that was stressed by a financial note from Credit Suisse reacting to the news by downgrading the company’s performance from ‘outperform’ to ‘neutral’.
"My choice to pursue an opportunity at another company was not easy, but I believe it is the right decision for me and my family,” said Mr. Rubin. “I have very much enjoyed my tenure as President and CEO at Ulta Beauty, working alongside some of the industry’s finest talent."
Rubin oversees a turnaround in the business
Since Rubin took over the post in September 2010, he has overseen a marked turn around in the company’s performance, despite the economic gloom in the North America, which has had a particular impact on the salon hair care category.
During his two and a half years at the helm, Rubin has overseen sales growth of 22 percent at the country, a figure that was capped off by a particularly strong performance during the all-important fourth quarter, which takes into consideration the holiday period.
In the last quarter the company reported that sales were up 30 percent to $757m, while same store sales rose by 8 percent, figures that bucked the trend in an otherwise quiet holiday season for the category.