In the second departure from J. Crew Group Inc.’s executive ranks this month, James Scully is trading in clothing for color cosmetics.
Scully, who has served as J. Crew’s chief operating officer since April 2013 as part of an almost 10-year tenure with the firm, has been named executive vice president and chief financial officer of Avon Products Inc. effective by April 1. As cfo, he will succeed Kimberly Ross, who left Avon in September. Robert Loughran, interim cfo since Ross’s exit, will return to his previous post as vice president and corporate controller.
Three weeks ago, Stuart Haselden, cfo of J. Crew, resigned to join Lululemon Athletica Inc. in the same position. J. Crew has named Joan Durkin, currently senior vice president and chief accounting officer, interim cfo as the company continues its search for a successor in that role. The New York-based specialty retailer said Wednesday that it soon would initiate a search for a new chief operating officer as well.
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At Avon, Scully will report to Sheri McCoy, chief executive officer, and oversee finance and information technology.
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McCoy commented that Scully’s “deep consumer expertise, track record of working in complex environments and experience developing opportunities in international markets make him the ideal fit for Avon. He is a seasoned finance and operational leader with public company cfo experience and will play an integral role in driving sustainable and profitable growth at Avon.”
A veteran of Bank of America and Saks Inc., Scully joined J. Crew as executive vice president and cfo in 2005 and added responsibility as chief administrative officer in 2008.
Among the details of Scully’s employment agreement is a base salary of $800,000 and the opportunity to earn an annual cash incentive award with a target of not less than $800,000.
“Jim’s departure comes at a time when we are looking at the way our team and business are structured,” said a spokeswoman for J. Crew. “His departure gives us flexibility to find a new [chief operating officer] with experience aligned with the company’s long-term strategic initiatives. Retail has been evolving quickly and we want to ensure we are set up for ‘the new world’ as we move forward.”
She added that the retailer has a “strong, deep management bench across the organization to draw upon and ongoing support from our sponsors, TPG and Leonard Green.”
While Scully has faced recent challenges at J. Crew — both Moody’s Investors Service and Standard & Poor’s lowered the retailer’s credit rating after it logged a third-quarter net loss of $607.8 million on $684 million in noncash impairment charges — Avon has endured a string of setbacks in recent years. Last month, it agreed to pay $135 million in penalties to the Justice Department and Securities and Exchange Commission after it pleaded guilty to violations of the Foreign Corrupt Practices Act in its efforts to break into the Chinese market. To restore the profitable growth McCoy is seeking, the company has embarked on a $400 million cost-cutting program. In October, Avon reported net income of $91.4 million for its third quarter on an 8 percent decline in revenues, translating into a 1 percent decline at constant currency.
Still, S&P lowered its corporate rating a single notch — to the highest level of speculative grade from the lowest tier of investment grade — based on the slow progress of its recovery.