Bare Escentuals' president resigns causing share slump
international sales push has resigned sending shares in the
mineral-based cosmetics manufacturer tumbling.
The company bought UK-based Cosmeceuticals Limited at the beginning of the year to diversify its distribution network, which had been criticized by industry experts for focusing too narrowly on America and the QVC home shopping channel. Sales are now taking off in Europe fueling overall growth with the company reporting a net sales increase of 30 percent to $126.6m for the recent third quarter. The resignation of Bare Escentuals' president Diane Miles provoked concern about the future prospects of the company without a crucial member of its management team. The company's share price fell 14 percent yesterday, hitting a year-low of $19.83 according to Reuters. Bare Escentuals' CEO Leslie Blodgett said: "Diane played a significant role over the past year and a half which contributed to our sales and staff growth. "While Diane will be missed, we are very fortunate to have a strong wholesale and international sales and marketing personnel, who will report to Jim Taschetta our chief marketing officer and me until a replacement is found." Diane Miles worked to establish the company's presence in Europe in her role as president and head of international sales, which she began in May 2006. She has filled senior roles at LVMH Moët Hennessy Louis Vuitton and began her career at cosmetics giant L'Oreal. Goldman Sachs analyst Amy Low Chasen told Associated Press that Miles' expertise in department stores and international business will be sorely missed as the company seeks to expand its distribution network further. The analyst also questioned whether operating issues were behind Miles' resignation. Several weeks ago Bare Escentuals reported that net sales rose 29 percent to reach $366.4m for the first nine months of the year, while net profit increased 80 percent to $61.1m. Despite posting strong financial results the company issued a profits warning over its sales in July and August. The company also released fiscal guidance mid way through the year explaining that sales through the infomercial channel, which had been the core of the business, was expected to be flat relative to last year.