Ms. Jung, 53, who has run the the company since 1999, will remain chairman and will work with the board to recruit a replacement, the 125-year-old company said in a statement today.
Avon, based in New York, is shaking up the executive suite amid slowing sales and profit growth as consumers confront unemployment and an economic expansion that has trailed forecasts. With its door-to-door model, Avon also vies with larger rivals such as Procter & Gamble Co.and Estee Lauder Cos.that can spend more on research and marketing and have a strong retail presence in fast-growing emerging markets such as China.
"The outcome may not have been a surprise, but the alacrity of the decision is ," Ali Dibadj, an analyst at Sanford C. Bernstein & Co. in New York, said in an interview. "We were expecting something after the holidays. The company has been under a lot of pressure and so has she. It's not an easy fix."
Total sales, excluding fluctuations in currency prices, rose 1% in the quarter. Avon said it no longer expects to meet its forecast for sales growth this year.
Ms. Jung recommended splitting the CEO and chairman roles "to better address the company's scale and opportunities," Jennifer Vargas, an Avon spokeswoman, said in an interview.
Ms. Jung is stepping aside as Avon investigates potential Foreign Corrupt Practices Act violations, which led to the firing of four executives over bribes to officials in China. Avon said Oct. 27 in a regulatory filing that the U.S. Securities and Exchange Commission had begun to look into the cosmetics company's actions as well. Avon generates more than 80% of its revenue from outside the U.S.
"When a company is under scrutiny like this it helps to have separation of roles," said Jeffrey Sonnenfeld, senior associate dean at the Yale University School of Management in New Haven, Connecticut, and founder of a nonprofit educational and research institute focused on CEO leadership and corporate governance. "She will be able to provide continuity and work on the transition."
Ms. Jung was born in Toronto and raised in Wellesley, Massachusetts, in a conventional Asian household with an emphasis on discipline, a strong work ethic and humility, she said in a 2004 interview with Bloomberg Markets. After earning a bachelor's degree, magna cum laude, in English literature from Princeton University in 1979, she joined Federated Department Stores' executive training program for retailer Bloomingdale's in New York.
She left Bloomingdale's in August 1985 and then served as senior VP-general merchandise manager at J.W. Robinson's in Los Angeles. In June 1993, Avon hired Ms. Jung as a consultant, asking her to research a possible expansion into selling through stores. She recommended against the move, saying the company wasn't yet ready for a push into retail. Her decisive approach impressed CEO James Preston, who hired her in January 1994 as president-product marketing.
In 1996, Avon put Ms. Jung in charge of global marketing. She set about creating a younger, more affluent image for the company, which had entered 15 countries since 1990 and was looking to expand into four more by 1998. One of Ms. Jung's first steps was to revamp the company's products, discontinuing 15% of Avon's products and introducing cosmetics that might appeal to a more upscale audience. She dropped gift items and some fragrances, added products such as Anew skin-firming cream with retinol and expanded into swimwear and spa products such as bath gels.
She also got rid of the "Ding Dong, Avon Calling" advertisements dating from the 1950s; new ads challenged women to "Dare to Try Avon." She became CEO in 1999, becoming the first woman to run Avon. She was the longest-tenured Fortune 500 female CEO.
-- Bloomberg News