MILAN, Italy — Luxottica Group SpA said founder Leonardo Del Vecchio will become interim chief executive officer after the Italian maker of Ray-Ban glasses lost its second leader in little more than a month.
The board accepted the resignation of former CEO Enrico Cavatorta as a director following disagreements on the current governance structure, the Milan-based company said in a statement late yesterday. Roger Abravanel also has stepped down from the board, Luxottica said. Del Vecchio, the company’s chairman, will take the helm until a pair of co-CEOs take over.
Luxottica, the world’s largest maker of eyeglasses, is in the midst of boardroom upheaval after Cavatorta followed his predecessor Andrea Guerra in resigning. The shares fell 1.3 percent to 36.80 euros at 9:17 a.m. in Milan, extending yesterday’s 9.2 percent slump, which was the steepest drop since February 2008.
“This management turmoil might affect business continuity in a critical moment,” Marco Baccaglio, an analyst at Kepler Cheuvreux in Milan, said in a note. “The damage to Luxottica’s credibility is likely to continue to weigh on the stock.”
Cavatorta quit after a debate over the appointment to the board of a person close to Luxottica’s founding family, according to a person familiar with the matter, who declined to be identified as the matter is confidential.
The resignation calls into question the ability of Luxottica to recruit outside management in the future, analysts said. The company “may struggle to attract strong candidates with an international background for the, as yet unfilled, role of co-CEO,” Mauro Baragiola, an analyst at Citigroup Inc. in Milan, said in a note yesterday. Citigroup downgraded its recommendation on the stock to neutral from buy.
Luxottica appointed Massimo Vian as co-CEO of operations and product, and is looking for a co-CEO of markets, the company said in yesterday’s statement.
Del Vecchio last month denied that he’s considering his children for management roles at the company he started in 1961. The 79-year-old billionaire, who still owns a 65 percent stake, was responding to a report in newspaper Il Sole 24 that cited him as saying that Guerra’s exit made room for his family.
By Daniele Lepido; editors: Celeste Perri, Paul Jarvis, David Risser.