Unloved tobacco manufacturer Imperial Brands (IMB) puffed 10.9p higher to £19.62 on the news it has poached the boss of premium car distributor Inchcape (INCH) to drive the next stage of its development.
Following a successful five year stint in the hot seat at Inchcape, Stefan Bomhard will join as chief executive officer (CEO) ‘at a date to be announced’. He will need to steer Imperial Brands through challenges in its e-cigarettes business and declining traditional tobacco sales.
PROFITS UNDER PRESSURE
Bomhard (pictured below) replaces Alison Cooper, whose departure was announced last October and who has stepped down immediately as CEO and a board director, at an uncertain juncture for the JPS-to-Davidoff maker.
Political and regulatory pressures are coming down hard on the tobacco sector and resulting in fewer US retailers and wholesalers ordering or promoting vaping products.
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In September, Imperial Brands’ shares slumped after the Winston-to-West maker coughed up a profit warning, cutting sales growth guidance amid hysteria over vaping in the USA as well as an aggressive push for market share in Australia.
In common with tobacco peers, Imperial Brands has been losing its defensive sheen as the public switches from cigarettes to smoke-free products. Recent research from Morgan Stanley suggests that tobacco firms’ pricing power is waning while volume trends are worsening too.
More recently, Imperial Brands has encountered a slowdown in Next Generation Products (NGPs) after a number of vaping-related deaths and high rates of teen e-cigarette usage in the USA stoked regulatory scrutiny over their safety.
MYBLU NEEDS A BOOST
At first glance, the move from luxury cars to cigarettes seems unusual, but Bomhard has amassed plenty of experience in the consumer and retail sectors during his career which should come in handy as he looks to boost sales of Imperial’s myblu vape and other brands.
His C.V. includes stints at the likes of Bacardi, Cadbury and Unilever (ULVR), not to mention Burger King and Procter & Gamble. Bomhard has demonstrated he can run a heavyweight international business too, Inchcape being an automotive distributor and retailer with truly global scale and a large emerging markets footprint.
As Thérèse Esperdy, Chair of the Imperial Brands’ board, enthused today: ‘Stefan has significant experience across multiple consumer sectors and within large multinational organisations, particularly in brand building and consumer-led sales and marketing.
‘He has demonstrated strong strategic and operational leadership and has developed a track record of delivering successful transformational change during his tenure at Inchcape.’