IMBBY Imperial Brands PLC (QX)

By Saabira Chaudhuri 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 4, 2019).

LONDON -- The chief executive of Imperial Brands PLC, Big Tobacco's longest-serving CEO, has unexpectedly resigned, the latest fallout from regulatory headwinds buffeting the industry.

Imperial said Thursday that Alison Cooper, who took the helm in 2010, will leave once a new chief executive is found.

The tobacco company, whose brands include Davidoff and Winston, is already searching for a new chairman and last week warned its sales and profit would be lower than expected this year.

Imperial, more than many rivals, has been under pressure following the Trump administration's plans, announced last month, to ban most vaping products in the U.S. Its shares have fallen about 15% over the past month.

Ms. Cooper and the Imperial board agreed Wednesday that she should resign, a spokesman said, citing the increasingly complex environment.

"The board is in agreement that it's time for some fresh thinking," he said.

Ms. Cooper, one of only a handful of women to head a FTSE 100 company, joined Imperial 20 years ago, steadily working her way up the ranks to become CEO.

The 53-year-old chief executive has led Imperial through a time of huge change for its industry, which has pivoted toward so-called next-generation products like e-cigarettes and devices that heat but don't burn tobacco. The shift has come in the face of slumping demand for traditional cigarettes and new regulatory constraints.

Ms. Cooper attempted to shift Imperial's strategy to stay abreast of the changing environment. In 2012, she launched a new unit, with its own CEO, to explore vaping products. In 2015, Imperial bought the Blu e-cigarette brand from Reynolds American Inc. in the U.S., the world's biggest vaping market. Ms. Cooper simultaneously pushed a cost-saving strategy, slashing the number of brands Imperial sold while managing to retain smokers.

But she ignored the heat-not-burn sector even as rival Philip Morris International Inc.'s device, IQOS, proved successful in several key markets, an omission that was to detract from Imperial in the eyes of investors.

Imperial is far more focused on e-cigarettes than its major rivals, leaving it more exposed to the U.S. crackdown on vaping. Regulators are taking a closer look at such products following a surge in teenage vaping and a slew of pulmonary illnesses, and even deaths, tied to e-cigarettes used for marijuana.

Other countries have tightened restrictions on vaping devices too. India recently said it was banning the sale of all e-cigarettes, while China has stopped online sales of products made by vaping giant Juul Labs Inc.

Imperial faces challenges with its traditional tobacco business as well, last week citing tough conditions for its Africa, Asia and Australasia division as one reason it slashed profit and sales estimates.

Analysts have also criticized the company's management for accounting practices they say don't offer a true picture of performance. Liberum analyst Nico von Stackelberg said the company's shares trade lower than justified given its economic prospects and that "the management of Imperial Brands are contributing to the discount."

A spokesman for Imperial defended the company's accounting policies but said it could improve transparency of its results. He said Imperial intends to strip out one-time items, such as the profit on sale of assets, from its adjusted profit measures in the future.

Corrections & Amplifications Ms. Cooper and Imperial's board agreed Wednesday that she should resign, according to a spokesman. An earlier version of this article incorrectly said the board had asked Ms. Cooper to resign, according to the spokesman. (Oct. 3, 2019)

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

(END) Dow Jones Newswires

October 04, 2019 02:47 ET (06:47 GMT)

Imperial Brands (QX) (USOTC:IMBBY)
Historical Stock Chart
From Mar 2024 to Apr 2024

Imperial Brands (QX) (USOTC:IMBBY)
Historical Stock Chart
From Apr 2023 to Apr 2024