Despite virtually doubling sales for the company since taking the helm of his grandfather's chewing-gum empire in 1999, Bill Wrigley Jr. in recent months has seen his star fade among Wall Street analysts following the 2005 acquisition of Kraft's LifeSavers and Altoids.
"We believe Wrigley needed to shake up the culture of the organization to regain its business momentum in an increasingly competitive chewing-gum market," said Credit Suisse analyst Rob Moskow in a research note. According to the note, Mr. Moskow said employees have relied too much on Mr. Wrigley to make decisions, creating a culture slow to respond to marketplace changes.
Ahead of expectations
Despite third-quarter earnings that were ahead of analysts' expectations and sales that were up 11% to $1.2 billion, analysts had downgraded the stock recently in response to a lackluster new-product pipeline and clear management issues.
Mr. Wrigley will step down from his chairman post to become executive chairman and will remain as chairman of the board as Mr. Perez, a long-time S.C. Johnson executive, steps into the president-CEO slot.
The upside, Mr. Moskow said, is that the removal of a Wrigley family member at the top -- for the first time in the company's history -- helps move the organization from "paternal" to "professional." The risk, though, is that Mr. Wrigley will "[fail] to give Perez the breathing room he needs to run the organization," Mr. Moskow said.
Mr. Perez left Nike after an apparent disagreement over marketing with Chairman Phil Knight.