P&G to move its beauty headquarters from the US to Singapore
Drosos made the surprise announcement during an exclusive interview with news provider CNN Money, news of which has been subsequently confirmed by Procter & Gamble.
The move is significant because Procter & Gamble has long been a deeply American corporate institution, headed up by mainly US executives and governed worldwide from the company’s Cincinnati headquarters.
Emphasis on being closer to the Asia Pacific market
It also emphasizes the increasing importance global cosmetic and personal care players are placing on emerging markets. With sales growth largely stagnating in the developed North American and European markets, higher growth in Latin America and the Asia Pacific region are proving a big draw.
Drosos is set to retire on September 1st of this year and will be replaced by Deborah Henretta, who has headed up the company’s Asia Pacific business for several years and helped drive significant growth throughout the region.
Henretta will now assume the title of group president, head of global beauty, skin care, cosmetics and personal care, and will be replaced in her role as head of the Asia Pacific operations by an Asian-born executive, Hatunson Kiriyama.
Asia Pacific business now headed up by an Asian-born executive
Industry experts have noted that this is the first time a non-American executive has been appointed to such a position, pointing to the fact that the company is now taking on more of a global identity as part of efforts to ingratiate itself with the higher growth emerging markets.
A Procter & Gamble spokesperson has confirmed that, although Drosos was instrumental in planning to relocate the beauty business to Singapore, she chose not to be a part of the actual move because of family commitments.
The spokesperson also confirmed that the Drosos was not looking to retire from her career and would be looking for a similar executive position with another company.
P&G says that the move will happen over the course of about two years and will not lead to any job cuts. It mainly affects around 20 individuals at an executive and management level.
P&G looks to restructuring to cut back costs and boost profits
Following the announcement of disappointing second quarter results back in February, the company announced that it was eliminating 1,600 jobs worldwide as part of a cost cutting initiative to help profits rebound.
The jobs will go in non-manufacturing divisions, and are expected to mainly affect individuals in positions such as marketing, which also falls in line with lower budgets for ad spend.
P&G’s second quarter results showed that sales growth slowed to 4 percent with a turnover of $22.13bn, compared to $21.35bn in the corresponding quarter last year, while sales for the first two quarters were up 6 percent to $44.05bn.
However, net earnings took a big tumble, falling 49 percent to $1.71bn, compared to $3.36bn in the corresponding quarter last year. For the full six months, this figure fell by 26 percent to $4.77bn.