Analysis - Remy Cointreau's new CEO "a very good hiring"
Remy is struggling to turnaround sales and profits
During last week's full-year results conference call, Remy Cointreau chairman & interim CEO François Hériard Dubreuil said he expected a new face to be sitting alongside him for the next call.
Dubreuil was clearly referring to Remy's CEO vacancy, and his comments made it clear it would be filled within three months.
So, it was no real surprise when late yesterday (10 June) the Remy Martin owner named Valérie Chapoulaud-Floquet as its new chief, to start in September.
What is a surprise, however, is that she is relatively unknown within the alcohol industry. With a background that includes 20 years at L'Oreal Group and six at luxury goods manufacturer Louis Vuitton, will her lack of experience in spirits hamper Remy's efforts to turnaround ailing Cognac sales and profits?
No, according to UBS analyst Olivier Nicolai, who told just-drinks today that Chapoulaud-Floquet's appointment is “a very good hiring”.
“Although she doesn't have any experience in selling spirits, she has a very strong background in luxury, particularly in Asia and the Americas,” Nicolai said. “You want someone with experience in those regions. Remy's Cognac is obviously more luxury than plain spirits. I think it's definitely a positive.”
Last week, Remy said it aims to broaden its geographical balance as it seeks to move reduce its exposure to China. In results for the past fiscal year, profits slumped as government measures on gifting dug into Cognac sales, forcing Remy to downgrade expectations. The company is confident of returning to growth in the next 12 months, but is keen to make more of other markets, particularly the US, where Remy Martin is in growth.
Chapoulaud-Floquet's experience for L'Oreal in Asia, Europe and North America and at Louis Vuitton as its Americas head looks set to stand her in good stead. Furthermore, Chapoulaud-Floquet's CV is also good news for Remy in opening up future markets.
“Remy is not present in Latin America, so that will be interesting,” Nicolai said. “She can use her knowledge to develop the region, which is what Remy wants to do.”
Another factor in Chapoulaud-Floquet's appointment - of more relevance to the industry than to Remy - is that she is a woman. In soft drinks, Indra Nooyi has run PepsiCo for the past eight years, while Jennifer Cue took over at troubled US firm Jones Soda in 2012. SABMiller has Sue Clark as its Europe boss. But, Chapoulaud-Floquet will be the only female chief executive of an international alcohol company.
That this has happened is certainly a case for celebration - that it has to be noted at all, perhaps less so. However, ultimately Chapoulaud-Floquet will be judged on results. And if she is unable to fulfil Remy's stated goal of sales and profits growth over the next fiscal year, whatever her gender, she will find her position at the top to be very uncomfortable indeed.
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