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Wrigley names outsider as chief

The replacement of a family member in the post with Nike's ex-CEO comes as the gum maker posts a 14% rise in profit.

October 24, 2006|From the Associated Press

CHICAGO — Wm. Wrigley Jr. Co. turned over the leadership of its chewing-gum empire to an outsider for the first time after four generations in the Wrigley family, naming former Nike Inc. Chief Executive William Perez on Monday to replace Bill Wrigley Jr. as CEO after a turbulent year.

Wrigley will remain chairman of the 114-year-old company, a job he has held along with the chief executive's role since his father died in 1999.

The surprise announcement came as the company reported a 14% increase in third-quarter earnings to $148 million, helped by a sales boost in Asia, exceeding Wall Street analysts' expectations.

The news resulted in the biggest single-day increase in Wrigley's stock in at least 20 years. Shares jumped $6.40, or 13.7%, to $53.23.

The gum, candy and mint manufacturer's once-highflying stock had declined sharply since last year, when the company spent more than $1.4 billion to buy Life Savers, Altoids and other businesses from Kraft Foods Inc. -- an expensive, debt-funded acquisition that it has struggled to absorb.

Bill Wrigley shook up the top management team in April as Chief Financial Officer Ronald Waters departed, but generating profit from the new businesses has continued to prove difficult.

He said it was his idea, endorsed by the board of directors, to bring in another executive to run the day-to-day operations while he focused on strategy and innovation.

"I will have a greater opportunity to focus on key growth strategies for the company that will drive our global leadership position," Wrigley said at a rare news conference.

The 59-year-old Perez lasted barely a year as an outsider CEO at Nike, resigning in January over differences with company co-founder Phil Knight.

Perez previously spent 34 years, eight of them as CEO, at Racine, Wis.-based S.C. Johnson & Son Inc., which like Wrigley is a family-owned business that derives more than half its sales internationally. He also will join Wrigley's board.

The company was founded in Chicago in 1892 by William Wrigley Jr., who got his start giving away chewing gum to merchants as an inducement to buy his soap and baking soda. His great-grandson Bill, who was thrust into the company's leadership at age 36, has maintained the company's relatively low public profile while more than doubling its sales. He is credited with pushing the firm to be more innovative and to introduce more products -- a strategy that ran into trouble with the Kraft deal.

"This isn't a sad moment for me," Wrigley said at his Chicago news conference. "I'm energized by this" and by getting the opportunity, he said, to focus more on strategy and be a more active chairman.

Quarterly net income amounted to 53 cents a share, compared with $129.7 million, or 46 cents, a year earlier. Revenue grew 11% to $1.18 billion.

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